Finance Base Point
A basis point (often abbreviated as bps, or sometimes bp), is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equal to one-hundredth of one percent (0.01%). Therefore, 100 basis points equals 1%. Understanding basis points is crucial for anyone involved in investing, trading, or managing financial assets, as it allows for precise and clear communication about changes that might seem small in percentage terms, but have significant financial implications.