Basis point (bps)

RECENT NEWS
newratings.com  Jun 12  Comment 
CANBERA (dpa-AFX) - The NZ dollar firmed up against its key counterparts in early Asian deals on Thursday, as the Reserve Bank of New Zealand hiked its official cash rate by 25 basis points to 3.25 percent, and signaled further tightening in...
SeekingAlpha  Jun 10  Comment 
By John Jansen: The US Treasury will offer the dealer community an opportunity to buy $28 billion of newly-minted 3-year notes today at 100PM. The issue looks cheap on a relative value basis. The WI roll is about 4.25 basis points and that prices...
newratings.com  May 19  Comment 
LONDON (dpa-AFX) - Innovation Group Plc (TIG.L), a provider of business process services or BPS and software solutions, reported Monday that its first-half pre-tax profit declined 29 percent to 4.8 million pounds from 6.8 million pounds last...
MarketWatch  May 2  Comment 
5-year Treasury yield spikes 10 basis points to 1.76% after strong jobs report
SeekingAlpha  Apr 25  Comment 
In this article, I look at the paper "Official Demand for U.S. Debt: Implications for U.S. Real Interest Rates" by Iryna Kaminska and Gabriele Zinna (of the IMF, but the paper does not represent the official views of the IMF). Their conclusion was...
The Economic Times  Jan 9  Comment 
National Bank for Agriculture & Rural Development or Nabard has slashed refinance rates by 20-30 basis points to boost farm investment and building warehouses.
The Economic Times  Dec 19  Comment 
"Possibility of a 50 bps hike over the next six months, but I suppose RBI will not do a 50 bps hike at one go , but maintain a calibrated approach."
FX Street  Dec 17  Comment 
A ForexTrading.TV Technical Analysis Video Alert for EURSEK For more information, read our latest forex news and reports.
FX Street  Oct 17  Comment 
A ForexTrading.TV Technical Analysis Video Alert for JGB For more information, read our latest forex news and reports.
MarketWatch  Oct 9  Comment 
Treasury prices were mixed Wednesday ahead of an auction of 10-year notes . The 10-year note yield, which moves inversely to price, rose half a basis point to 2.639% ahead of a $21 billion sale of the notes. The 30-year bond yield rose 2.5 basis...




 

For the article on the company with ticker BPS, see BlackRock Pennsylvania Strategic Municipal Trust (BPS).

A basis point (abbreviated as 'bps' and sometimes pronounced "bips") is a unit that is equal to 1/100th of 1%, and is often used instead of percentages when discussing interest rates, rates of return, and other percentage-based performance metrics that can occur as fractions of a percent. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

It is common practice in the financial industry to use basis points to denote a rate change in a financial instrument, or the difference (spread) between two interest rates, including the yields of fixed-income securities.

1% change = 100 basis points, and 0.01% = 1 basis point.

So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points. The marginal effect of each basis point change in the value of long term bonds can be very significant for this reason changes are tracked by basis points or 1/100th of 1%

Since certain loans and bonds may commonly be quoted in relation to some index or underlying security, they will often be quoted as a spread over (or under) the index. For example, a loan that bears interest of 0.50% per annum above the London Interbank Offered Rate (LIBOR) is said to be 50 basis points over LIBOR, which is commonly expressed as "L+50bps" or simply "L+50"

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