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When Nick sees Gatsby at the end of Chapter 1, Gatsby has his arms outstretched in the direction of the green light, which "might have been a light on a dock." In fact, this green light is at the end of Daisy Buchanan's dock. Gatsby is yearning for Daisy, eager to have her as his; she's close, yet not quite within his reach.
The color of the light, green, is the color of money, which is a major motif in the novel. After all, Gatsby is enormously wealthy as are the Buchanans. Green also suggests "Go," the idea that Gatsby is free to pursue Daisy, the girl of his dreams.
At this early point in the novel, Nick has not yet met his mysterious neighbor Gatsby, and the reader has made only a brief connection between Gatsby and Daisy, thanks to Jordan Baker's reference to him at the Buchanans' dinner party and Daisy's quick response of "Gatsby? What Gatsby?"
The subsequent chapters will unfold more about the relationship between Gatsby and Daisy as well as offer more examples of color imagery.
This question has been answered many times before here on eNotes. Here is a comprehensive link for you: http://www.enotes.com/great-gatsby/q-and-a/tags/green+light
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