BPS or Basis Point is a finance unit of measurement which is always equal to 1/100th of 1%.
In the finance sector or economic market, BPS is used as a method to measure interest rates, and the current yield on a fixed income such as stocks or shares, or to calculate rates and percentages for other types of financial securities.
Basis Points can be used in a variety of ways, the most common are:
For example, Exxon Mobil announced it saw a decrease in production after the market estimated that there could be an increase. Stock prices decreased by 400 BPS or 4.0% in one-day trading.
Other financial instruments where BPS is prevalent
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