Glossary · from the DESK dictionary
Basis Point (BPS)
A unit equal to one-hundredth of a percentage point (0.01%).
In plain words
A precise way to describe small rate or yield changes without ambiguity.
Example
A rate hike from 4.00% to 4.25% is a 25-basis-point increase.
What it means for traders
The standard unit in rate and bond markets, used to avoid confusion in percentage figures.
Common pitfalls
Confusing percentage points with basis points is a common source of calculation errors.
Related terms
Policy Rate
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.