Basis Point

In finance, the term basis point refers to a common measurement unit used to track values. Typically, a basis point is equal to 0.01% (0.0001), with 100 basis points equal to 1%.

Basis points are commonly used in quoting yields and interest rates. The percentage interest point or “pip” used in forex trading is another example of a basis point.

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.

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