A unit of measurement equal to 0.01% (1/100th of a percentage point) used in finance to describe small changes in interest rates, yields, or other percentages. One hundred basis points equal one percentage point.
'Basis' from Greek 'basis' meaning foundation or step, 'point' from Latin 'punctum' meaning small mark. The term emerged in bond trading in the mid-20th century when traders needed precise language for small rate changes that could mean millions in profit or loss.
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