Let's start with an example. On 26 February 2019, the gaming company Sea Limited (ticker: SE) closed at 16.20. In the after-market hours, the company reported much better than expected earnings. How do we know that the earnings were better than expected? Because the next morning the stock opened 15% higher at 18.64. The stock continued to move higher for the rest of the day, closing at 21.99. In other words, after gapping up, the stock still moved up another 18% during the day.
