Learn about investing, trading, retirement, banking, personal finance and more.
When percentages being used to describe a security are very small, basis points are often used to describe the numbers.
A Basis Point (bp) is 1/100th of a percent, so 1% = 100 bps.
This metric is used when discussing financial instruments for which very small changes in percentages can make a difference.
For example, rates on single premium immediate annuities change weekly, and generally only by a few basis points. These small changes can make a difference competitively week-to-week, because a few basis points can translate to thousands of dollars of income over time. Other places where basis points are used include: advisory and management fees, moves in indexes and securities, bonds, and so on.
When interest rates and yields change, basis points are used in the Price Value of a Basis Point (PVBP) and other calculations to measure the effects of such movement on bond prices.
There may be fees and commissions involved in the purchase of ETFs, and ongoing expenses that reduce earnings over time
Analysts have popularized the notion that the 4-year presidential election cycle holds secrets to bear and bull markets
Ginnie Mae brokers mortgage-backed securities which are backed by the full faith and credit of the US Government
If you buy a put or call option, your ticket with say “buy to open” since you are opening a position and increasing...
A monopoly is an unhealthy situation in the market in which a single company is the only option in a specific sector
Real rate of return is a notion that takes inflation into account before reporting a rate of interest on an investment
A foreign fund is a mutual fund that invests solely in companies abroad, and does not invest in corporations in the US
A market-on-close order is used to execute a trade at the last possible moment before the market closes for the day
Household expenses are sometimes also called a family budget. In some cases this can be limited to items purchased...
Income for an area or country it totaled up and divided by the total population of the area to give us the Income Per Capita