The stock market is measured in points, so what does a point equate to?
The Indices on the stock market indices i.e Nifty,Dow Jones,Nasdaq,DAC etc represent movement in some particular stocks and some of them also show the representation of all the stocks in the market.Thus the on the whole these points on the indices represent the movement in the value of the share prices in various stocks listed on the stock exchange…
“The stock market has been a huge generator of wealth as well as a source of funding and liquidity for companies. As stock ownership becomes more widespread, particularly due to participation in retirement plans such as 401(k)s and IRAs, additional media sources cover the markets in more ways. The terminology can sometimes be confusing, but is often simple to understand with some background.” “InstructionsDifficulty: Moderately Easy Step 1 Verify the type of stock market points you are viewing. There is a difference between points as they apply to individual stock and as they apply to stock market indexes. Step 2 Read points as dollars if you are talking about an individual stock. For example, if IBM stock is up 4 points, then it is up $4. Step 3 Interpret fractional points on individual stocks as percentages or fractions of a whole dollar. Historically, stocks did not trade in dollars and cents, but rather down to specifically dictated fractions such as 1/8, which is 1/8 of a dollar.
At some point far in the past, they nominated a day at which the basket of shares they were using (e.g. the top 100, the top 500) were worth 100 points. The current value of the stock exchange is what that basket would be worth today. It gets more complicated, because as companies slip out of the top 100, or get taken over, or whatever, they have to replace them with new ones. But the weighting of the new ones is arranged so that the change does not change the current value of the basket.
