What is day low in the stock market?

The day low in trading refers to the lowest price at which a security, such as a stock or commodity, has traded during a particular trading session. It represents the bottommost level reached by the price of the asset within the timeframe of a single trading day. The day low is an essential data point for traders and investors as it provides insights into the intraday price movement and helps gauge the trading range for the day.

What are the factors influencing day low?

Several factors influence the day low of a security during a trading session. Market sentiment, economic indicators, geopolitical events, company-specific news, and trading volume are among the key factors that can impact the day low. For example, negative news about a company's financial performance or industry-wide concerns can lead to selling pressure, pushing the price of the security to new lows for the day. Conversely, positive developments or bullish sentiment in the market may help support prices and prevent them from reaching the day low.

How to use day low in options trading?

In options trading, the day low can serve as a reference point for traders to assess the intraday price movement of the underlying asset. Traders may use the day low to set stop-loss orders or establish entry and exit points for their options positions. For example, if a stock's price approaches the day low and shows signs of bouncing back, traders may interpret this as a potential support level and consider buying call options. Conversely, if the price breaks below the day low with significant volume, traders may interpret this as a bearish signal and consider buying put options or exiting existing long positions.