What is 'uncle point' in Finance?

October 23, 2017 12:15 am | Updated 12:15 am IST

This refers to the maximum amount of pain, as defined by the size of a paper loss, that a trader is willing to incur before he gets out of a trading position. In other words, it is the point at which a trader is unwilling to incur any further losses and decides to throw in the towel and get out of his trade. Traders are advised to clearly define their uncle point before entering a trade in order to cut their losses quickly, thereby avoiding situations where they are locked in with unbearable amounts of losses. It originates from the American expression “Say ‘uncle’!”, wherein an opponent in a battle is forced to utter the expression as a mark of surrender to his opponent.

Top News Today


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.