What Is A Basis Point (BPS)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

A basis point is a unit of measure that is equal to 0.01 percentage points, i.e. a bond with a yield of 450 basis points has a yield of 4.5% (450 x 0.01).

Basis points are used when pricing bond yields, credit default swap financing costs, interest rate changes etc.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.