Points

Introduction: Points

Generally, points are used to describe financial matters. The use in various contexts may differ however, one language and information is still passed, which is finances. For instance, the point can be used to denote the percentage change in returns or the movement of stock price, either high or low. It could also signify the rate of interest on a mortgage. Another name for points is bps(basis points).

When it is in the context of stock price, a point is $1 but in the change in bond price, it is 1%. This is to show that point always sums up to one.

Points meaning

Points are always used to determine one. It could be one dollar or one percent or one stock exchange, it generally talks about one. Let’s break it down a bit. Points are mainly used in bonds and stocks.

For instance, a single point in bonds and debentures is 1% while in stock, that same one point is $1.

You can see that points’ meaning can differ depending on the message that is passed across or the context it is used in at a particular period of time.

Points examples

Two examples of points can be seen in points in stocks and securities or points in mortgages and loans.

• Points in stocks and securities: In the stock market, points show the path the market or the single stock is progressing. Points are very important because they tell you the point the stock market is at a particular time. There might be a rise or a fall in stock prices and this would help an investor know what to expect if they are looking at purchasing a stock or if they own a stock already. Going further, if a single point which is $1 is trading at $70 and rises to $75 and later falls to $65 per share, it is evident that five points equate to both the rise and the fall.

• Points in mortgage and loans: Mortgage points are typically classified as buying down interest rates. This means that an investor can decide to pay upfront and on the other hand have monthly payments or pay a lower interest. As we discussed earlier, mortgage points are 1%. For example, if a loan of $500,000 is taken, one point of this loan would be $5,000. If a loan of $200,000 is taken, one point would be $2000.

Points table

Points table is a range in numbers or figures as regards the change in numbers or figures. It tells when the stock rises and falls. Points tables are necessary and important especially for investors that are looking at purchasing a stock or getting a loan. The tables can help them know what to expect and if they should take the risk.

Conclusion 

Points can be defined as different things if you check the dictionary. You would see points as staying in a particular place or an award of figures given to a team or individual during a competition. More definitions are found in Wikipedia. However, in this context, the point talks about money, finances, stock, e.t.c and how they affect the market. 

The importance of knowing what points are and how to use them is very necessary. Especially if you are looking forward to taking over the stock market or at least, know how it works.