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


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
©2004-2016 Investor Glossary - All rights reserved - Terms of Use