[briant]

The S&P/TSX is at 11,436.92 down 47.59 points from Fridays open for a loss of 0.41%.

Very basic question here, what exactly is a point? How is it calculated?

I looked it up on investopedia: http://www.investopedia.com/ask/answers/04/043004.asp but they refer to indexes using basis points, so TSX would be down 41 basis points. Basis points and "points" are different in the context right?

 

[briant]

Basis points I understand.

I don't think leslie has answered my question. What is a point, and how is the index value measured using it?

 

[briant]

So it basically represents the value of all of the stocks in the index relative to the base value (in points) from a previous date.

Given that, it seems to me that a 200 point or 600 point drop in an index is virtually meaningless and what's more important is the relative percentage changes we see.

Thanks for clearing it up!