Markets
Platforms
Accounts
Investors
Partner Programs
Institutions
Contests
loyalty
Trading Tools
Resources
A basis point is a unit of measurement used in finance to describe the percentage change in interest rates, bond yields, or other financial metrics. One basis point is equal to 0.01% (1/100th of a percent). Basis points are commonly used to express changes in interest rates or bond yields because they provide a clear and precise way to describe small changes without ambiguity. For example, if an interest rate increases from 2.50% to 2.75%, that is a 25 basis point increase.
If a central bank raises its benchmark interest rate from 1.00% to 1.25%, this is described as an increase of 25 basis points.
• Equals 0.01% or 1/100th of a percent.
• Used to describe small changes in interest rates, bond yields, and other financial metrics.
• Provides a precise way to measure and communicate changes in percentages.
They provide a precise way to measure and communicate small changes in financial metrics, reducing ambiguity.
One basis point is equal to 0.01%.
They are often used to express changes in interest rates or bond yields.
Start Your Journey
Leverage your insights and take the next step in your trading journey with an XS trading account.
