52-Week High/Low
What it is:
The 52-week high and low refers to the highest and lowest market prices of a given security over a 52-week (one year) period.
How it works (Example):
If you observe the market prices for a given security during a specific period of time, there will be a price that is higher than all others and a price that is lower than all others. The 52-week high and low for the price of any actively traded security expresses the highest and lowest price over the course of the previous year (expressed as 52 weeks).
To illustrate, suppose you are looking at changes in the market price for company XYZ's common stock over the previous year. You find that XYZ's common stock traded at $200 per share at its highest and $120 per share at its lowest. It can be said, that the 52-week high/low for company XYZ's common stock was $200/$120.
Why it Matters:
The 52-week high/low serves as an indicator for potential investors. Investor's will often reference the 52-week high and low for a stock when looking at the current price. If the price is near or approaching the 52-week low, they might consider it a good time to buy. If the price is nearer or approaching the 52-week high, it might not be a good time to buy. Also, in the latter situation, it may signal a good time to sell.
