In terms of economy and finance, BP means base point, which is the unit of measurement of interest rate changes of bonds and bills.

For example, when the Federal Reserve cuts the federal benchmark interest rate by 50 basis points, it is equivalent to a drop of 0.5 percentage points.

In finance, a measure of the change in interest rates of bonds and bills. One basis point is equal to 0.0 1 percentage point, that is, 0.0 1%, so 100 basis points is equal to 1%.

[Example] The interest rate in a floating rate bill may be 65,438+00 basis points higher than LIBOR, and 65,438+000 basis points is equivalent to 65,438+0%, and the interest rate of this bond may be 0.65,438+0% higher than the commonly used LIBOR interest rate; When the Federal Reserve announced a 50 basis point rate cut, it was equivalent to a drop of 0.5 percentage points.

The concept of base point:

1. Place as the basis for some activities: take cotton-producing villages as an example to promote new cotton production technologies.

2. The foundation of the development of things; Foundation: Understanding the situation through investigation and study is the solution to the problem.

3. Base point in 3.CAD: Determine the base point according to the actual situation. For example, rotation will have a central point, and this central point is the base point.

4. Base point in the network: based on a PC or a site, the center radiating to the surrounding or peripheral network is called the base point.

5. Center; Key point.

6, the concept of finance, benchmark, referred to as the basis. Concept: the difference between the spot price and the futures contract price of the same commodity. That is, the gap between the current price and the futures price.

The basis point is defined as "0.0 1(0.0 1%)" or "100% of a percentage point". It is widely used to calculate interest rates, exchange rates and stock prices, because these fields need to involve the calculation of tiny percentages. Simply put:

One hundred ideas = one percent.

Ten thousand ideas = one hundred percent = one.

When comparing percentages, in addition to percentage points, the subtle differences between the two percentages can also be expressed by ideas. For example, the difference between 4.02% and 4.05% is 0.03 percentage points, that is, the difference is 3 points.

In Chinese mainland, it is customary not to add the word "ge" between numerical value and "concept" (that is, three concepts are usually said instead of three concepts). Percentage points must be added with "a" (only 0.03 percentage points can be said).

The concept of commodity futures

Basis (basis point) The difference between the spot price of the same commodity and the futures contract price. That is, the gap between the current price and the futures price. Calculation formula:

Spot price-futures price = basis point

Due to the cost of holding, the basis point is usually negative. In general, the spot price is actually lower than the nearby futures price. As the delivery deadline approaches, the holding cost decreases, and the difference between spot and futures prices narrows. The basis points are 1, enhanced basis point) 2, weakened basis point) 3, country basis point) 4 and premium basis point.

Reason: 1, storage cost of goods; 2. insurance; Step 3 pay interest