General
basis point
What does basis point mean?
0.01%. One hundred basis points = 1%. Used everywhere interest rates, yields and fees live, because 'the Fed hiked 25 basis points' is unambiguous while 'a quarter percent of a percent' isn't. Written 'bp' or 'bps', said 'bip' or 'beep' on desks.
"The Fed went 50 basis points and the curve flattened on the spot."
Frequently asked questions
What is a basis point?
A basis point is one hundredth of a percent (0.01%) — the unit finance uses when "percent" is too clumsy or imprecise.
How do you use basis point in a sentence?
"The central bank raised rates by 25 basis points, or a quarter of a percent."
How many basis points are in one percent?
There are 100 basis points in one percent, since each basis point equals one hundredth of a percent.
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