What does bps mean?
Bps, also called basispoints, is the plural form of bp, and basispoint is the base point. The base point is usually abbreviated as bp or bps.
One hundred basis points is equal to one percent, and 1 basis point is equal to 1% of1percentage point, that is, 0.0 1%, which can be expressed by the arithmetic symbol _. So 100 basis points is equal to 1%.
Like percentage points, the basis point can only avoid the ambiguity between the relative and absolute discussions about interest rates by dealing with the absolute changes of interest rates.
Basis points will be widely used to calculate interest rates, exchange rates and stock prices, because these areas need to involve the calculation of small percentages.
In a word, bps is the abbreviation of basis point, and one hundred basis points is equal to one percent. Secondly, it is widely used in the field of calculating a small percentage. Finally, it can reduce the friction caused by people's pursuit of absolute and relative numerical situations.
The basis point is often used to indicate the price difference of a commodity in spot and futures trading, and the value is generally negative, because the spot price is generally lower than the similar futures price, and both will fall when the trading time approaches.
When we apply for loans, especially mortgage loans, our loan interest rate is generally based on lpr interest rate. Generally, different banks give different basis points, so we can compare them more.