Investor Glossary-basis pointsInvestor Glossary-basis pointsInvestor Glossary-basis pointsInvestor Glossary-basis pointsInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Basis Points

The HTML to link to this page
 

Basis points are the number of points often used to quote changes in yields on bonds or the difference in rates as quoted between the yields on two bonds. Basis points are the number of points equal to .01% or 1/100th of 1%, so, for example, a 5% rate change in a bond or other fixed income instrument is a change of 500 basis points. A price change in a bond that caused the yield to increase by 0.5% to 5.5% from 5.0% has a yield change of positive 50 basis points, and a bond that moves from 5.0% to 4.5% has a yield change of negative 50 basis points. Basis points are used to quote changes in financial indexes including both equity and bond indexes and interest rate changes: "the prime rate rose by 50 basis points after the Federal Reserve Board meeting". Spreads between two fixed income instruments are also quoted in basis points: "the offering came at a 150 basis points spread versus the 10 Year government bond."



Rate this basis points definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: required rate of return, ex-dividend, Zero Cost Collar, debt service coverage, quality assurance, class C shares, LIBOR, command economy, stock market close, per diem, VIX, reverse mortgage, 401a, current ratio, implied volatility, labor relations, stock split, deferred tax, APR, cancelled check, 1035 exchange, phantom income, deferred revenue, liquidity ratio, minority interest, in escrow, real GDP, irrevocable trust, average price per share, covered put, inflation, open position, 1031 exchange, Key Rate Duration, margin rate, EBITDA, risk management, retained earnings, 144a, wholly-owned subsidiary, FTSE, dividends payable, limit order, ex-dividend date, balance sheet, FICO score, annual return, option premium, diluted share


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use