Today's high refers to a security's intraday high trading price. Today's high is the highest price at which a stock traded during the course of the day. Today's high is typically higher than the closing or opening price. More often than not this is higher than the closing price.
When you look at a stock quote, you can find today's high by looking at the second number listed next to "range." One way that day traders and technical analysts use today's high, along with today's low, is to help them identify gaps or sudden jumps up or down in a stock's price with no trading in between those two prices. For example, if today's low is $25 and the previous day's high is $20, there is gap. The identification of a gap, along with other market signals such as changes in trading volume and overall bullish or bearish sentiment, helps market analysts generate buy and sell signals for particular stocks.
Short-term traders use intraday price movements and charts to determine the correct time to enter or exit a trade. Based upon this analysis, they implement trading strategies and capitalize on short-term price fluctuations.
Intraday strategies are also used to trade options. Option prices don’t change as quickly as underlying stock prices, so traders use intraday prices to identify periods when the option is mispriced relative to the stock.
Intraday price movement is closely linked with day trading, the practice of buying and selling financial instruments within the same trading day. Many day traders are bankers or investment firm employees. However, since the advent of electronic trading, day trading has become increasingly popular with at-home traders.
There are numerous intraday strategies, which include scalping, which attempts to make numerous profits on small prices changes; range trading, which essentially uses support and resistance levels to determine buy and sell decisions; and news-based trading, which typically uses heightened volatility around news events that may create trading opportunities.
The biggest advantage of intraday trading is that positions are not affected by the possibility of negative overnight news that have the potential to materially impact the price of a security. Such examples of potentially negative overnight news are key economic and earnings reports as well as broker upgrades and downgrades that occur, either before the market opens or after the market closes. Trading in an intraday basis offers several other key advantages that include the ability to use tight stop-loss orders and access to increased leverage. Disadvantages of intraday trading include insufficient time for a position to increases in profit and increased commission costs due to trades being taken more frequently.