There are three explanations of it in the IBOX under "MORE NOTES".
The bottom line is this. It is essential to have the rule or else the CONTEST would be a joke!
GAMM is a perfect example. The bid/ask is $.51/$1.08, yet somebody paid $1.39 near the close. That is CLEARLY a bogus number!
I encountered the same thing with RGMI. I wanted to BUY it at the close one day ($.43). However, the next day, it opened at $.67 on no news (see chart below - March 16). If it had opened at $.49 (or less), I would have gotten the trade. However, since the $.43 was a bogus number (!) then it clearly was not valid to buy it at that price. WHY? The reason why is because in real life I could never have bought it at that price. I eventually traded for it for $.65 - a FARRRR cry from $.43!
What if a stock was 20 cents and it had a bogus trade of $1.00 near the end of the day. Everybody who owned it would immediately freeze it at a 400% gain. The next morning, it legitimately trades back at 20 cents. That is clearly unacceptable because it basterdizes the entire contest!
Having been unable to capitalize on that very issue already myself in this contest more than enables me to make these comments. However, irrespective of whatever I personally did or did not do, it is just common sense.
SSK and I agreed to 15% based on no news. If a BUY opens more than 15% above the close then the trade is invalid. If a SELL opens more than 15% below the close, then the trade (or freeze) is invalid.
The only issue that was never dealt with, and one I'm happy to compromise on, is whether the person should have the option of accepting the opening price. I personally have no problem with that.
In other words, if my buy of RGMI had been $.53 instead of $.49, it would have negated the $.43 previous close, but then I could have been given the option to accept $.53, or not, by the end of the next trading day. If I accepted it, then the buy would have been at $.53. As it was, this issue had not come up and the open the next day was $.67 and I didn't want to pay that at the time, so it was a moot point.
In the case of GAMM, 15% below $1.39 is $1.1815. Let's say it opens at $1.00, then the person (in this case - SSK) should have the right to decide if they want to accept the $1.00 price or not - and, like everything else, they should have until the end of the next business day.