the highest, or lowest, price that a financial asset, such as a stock or commodity, has been traded for in the past 52 weeks, or around 13 months.
How 52-Week Highs/Lows Work
Simply put, 52-week highs/lows indicate whether an asset has done well in the recent past and could do well in the future. To investors, this indication is essential in deciding when and how much of an asset to buy or sell. As a result, the 52-week high/low is one of the first values you will see when researching to determine the asset's potential. Research on an asset will generally produce both of these values (the 52-week high and low), allowing you to take the difference between the two- and the asset's volatility, into account.
52-week highs and lows, often accompanied by the general date of when they occurred, are routinely used concerning stocks (a type of asset) because they give a quick overview of the asset's reputation. In this case, the 52-week high or low could point out a period in time when the value of the stock dropped, possibly as a result of company news or financial issues, or rose, usually when others recognize the value of that asset due to preceding events that show a new potential for growth. This knowledge helps investors gauge market influences and risks associated with that asset and its performance. To best model this information for stocks, 52-week highs and lows are often based on the daily closing prices from the last 13 months.
Real World Example of 52-Week High and Low
If, at this moment, you were to look up the stock price of virtually any company in the market, your search engine would immediately present you with a quick overview of that company's history, including the recorded 52-week high and low at that moment. For the sake of this example, we will be using Apple's (whose stock symbol is AAPL) recorded stock information during the first couple of weeks of March 2021.
With just a few taps of the keyboard, Google would immediately give all of the promised information, reporting Apple's 52-week low to be 53.15 in March 2020 (about one year prior) and 52-week high to be 145.09 just two months before the search in January 2021. This information alone can tell you about the stock's potential and trend without the inspection of complicated charts and graphs. As the 52-week high price came after the 52-week low price and because they are pretty varied in value, it is safe to say that there has been a positive trend (the stock's value has increased) over the past 52 weeks. And, when you look at how the 52-week high price occurred recently compared to the search, this could support the proposal that Apple's stock value could continue to rise.
Suppose you were to use this information along with data such as Apple's financial status and the recent news surrounding the company. In that case, you could probably get a relatively good idea of the potential and the risk of buying stock in the company. This is what makes two simple numbers and dates, the 52-week high and low plus their general date of occurrence, so convenient: they tell so much about the asset in a simple manner.