Basis point (bps)

RECENT NEWS
MarketWatch  Mar 26  Comment 
An auction of 2-year Treasury notes saw weak demand, pushing yields higher across the board. The 2-year Treasury note yield rose 2.5 basis points to 2.287%, according to Tradeweb data. The 10-year note yield was up 1.9 basis points to 2.845%,...
Mondo Visione  Mar 21  Comment 
Yields on 3-month and 10-year Treasuries have moved in different directions. According to Tradeweb data: U.S. Treasury Yields (change in bps) Security Current Close: 3/20/2018 Change ...
The Economic Times  Mar 21  Comment 
The vote to lift the federal funds rate target range to 1.5% to 1.75% was a unanimous 8-0.
The Economic Times  Mar 20  Comment 
The US Fed should not hide the uncertainty that still surrounds important policy inputs.
The Hindu Business Line  Mar 16  Comment 
IDBI Bank has upped retail term deposit rates by 25-150 basis points across select maturities with effect from March 12. The maximum increase is in the case of short-term deposits of up to 90
The Hindu Business Line  Mar 10  Comment 
Oriental Bank of Commerce has hiked its marginal cost of fund-based lending rate (MCLR) by 5-15 basis points across various tenors. The new rates will take effect from March 12. However, th
MarketWatch  Mar 9  Comment 
Treasury yields maintained gains on Friday after the jobs report. The 10-year Treasury note yield was up by 0.8 basis point to 2.875%. The 2-year note yield picked up 1.4 basis point to 2.875%. The 30-year bond yield rose 1.5 basis point to...
MarketWatch  Feb 27  Comment 
Treasury yields rose sharply during Federal Reserve Chairman Jerome Powell's testimony after he said the economic outlook had strengthened since December. The 10-year note yield shot up 5.1 basis points to 2.910%, according to Tradeweb data. The...




 

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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