Basis point definition

A basis point (also referred to as bp – pronounced bip or beep) is a unit used in trading to describe movements in interest rates or other percentages. It is equal to one hundredth of one percent, or 0.01%.

The basis point is used because changes in percentage rates involved in trading are often less than 1%. Central bank base rates, for instance, can have a major impact when changed by just a few basis points. The same is true for changes in the yield available from certain investments. If £10,000 is invested in an instrument with a yield, then each basis point move would be equal to £1 of profit returned.

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For more information on when basis points are used, visit the education section.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.