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Why Is Gap Risk Higher during Weekend Trading in Traditional Finance Compared to 24/7 Crypto Markets?

Traditional finance has structural gap risk due to weekend closures; 24/7 crypto markets eliminate this closure-based risk.
Greeks.live05.12.25

Why Is Gap Risk Higher during Weekend Trading in Traditional Finance Compared to 24/7 Crypto Markets?

Traditional financial markets (stocks, indices) close for the weekend, creating a period of non-trading. If significant news or events occur during this closure, the market will "gap" upon reopening to reflect the new information.

Crypto markets trade 24/7, so information is priced in continuously. While crypto can still gap due to low liquidity, the structural gap risk inherent in a weekend closure is eliminated.

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Glossar

Gap Risk

Volatility ⎊ Gap risk represents the exposure to sudden, significant price movements between trading periods or during low liquidity events.

Weekend Trading

Liquidity ⎊ Trading activity during traditional off-hours, characteristic of crypto markets, often features lower liquidity pools compared to weekday sessions.

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