Definition of point

Shorthand for a one-unit movement in the price of a security, commodity or derivative instrument. The actual size of the unit depends on the market and the country involved.


In the case of a bond, one point is normally one per cent of its face value. In the case of a stock traded in the US, it is a movement of one US dollar. The term is also used to describe the upfront fee charged by mortgage arrangers in the US, with one point equal to one per cent of the total amount of the loan.