In the stock market, BPS Full Form is Basis Points. A basis point is a unit of measure used to describe changes in the interest rates of financial instruments. It is commonly abbreviated as bp, bips, or bps.

Key Features of Basis Points:

Basis points are a way to quantify percentage changes in the value of financial instruments. One basis point equals 0.01%, or one-hundredth of a percent. To convert a percentage into basis points, multiply the percentage by 100. Conversely, to convert basis points into a percentage, divide the number of basis points by 100.

Why Do Investors Use Basis Points?

Investors use basis points to quantify incremental changes in interest rates for securities and to report changes in these rates. This unit of measure helps avoid ambiguity and confusion, especially when the change in interest rates is less than one percent. Basis points are commonly used in various financial contexts, including corporate bonds, treasury bonds, credit derivatives, and interest rate derivatives.