QUICK DEFINITION
Basis Point is one hundredth of one percentage point. One basis point equals 0.01%.
WHY IT MATTERS
Why Basis Point matters in bond markets
Bond yields and spread changes are usually discussed in basis points because small rate moves can create meaningful price changes.
MARKET CONTEXT
How to think about it
Bond investors use basis point as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Basis Point important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Bond yields and spread changes are usually discussed in basis points because small rate moves can create meaningful price changes.