XPE Lounge, page-1221

My understanding is that it depends on what type of gap it is. Our last gap was a runaway gap created by intense short-term trader demand. This intensity was created by going into trading halt prior to open on Monday 5th September. The halt was called pending the announcement of Martin Despain's appointment. As you can imagine, panic amongst traders ensued as they looked to make a quick profit on the back of good news when the halt lifted, hence the gap (and run) up as demand grows and supply decreases; but then of course generally back down unless a significant rerate was warranted. The reason why runaway gaps generally close is they are usually created by traders who quickly leave later that day or the following once they have secured profit. Admittedly the gap might take weeks to close (XPEs May 2016 gap was not closed until late August 2016) but the point is that if the news is not strong enough - eg it has something material in it $$$$ - then it will usually close at a later point as a significant rerate wasn't justified. In short, the increase in short-term sentiment and share price was artificial as it was driven by short-term traders who flood the market with their shares once they have made a buck.

Hope that makes sense