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I want to make a grid around all my points, convert to a polygon and use this to clip the extent of my data. I am using Arc 10.2.

How do I make a grid and then convert it to a polygon? Or is there a way to miss some of these steps?

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You can convert these points to raster by FeatureToRaster and set cell size to grid width, Then use RasteToPolygon convert raster to grid polygon.

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