- This topic has 2 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
In the revision kit they have in some some questions they have used basis points for example “less 30 basis points”
I have gone through your lecture videos and come across tick i understood that
IS tick and basis points the same or different?
I do understand the concept of basis risk
just the difference and whether the implementation is the same or not
We use the word basis point when we are referring to a change of 0.01% in the rate of interest, and we use the term tick when we are referring to a change of 0.01 in the futures price.
Questions sometimes give you the tick value (i.e, the gain or loss due to a 1 tick change in the futures price) but as I explain in my lectures you never actually need to answer in terms of ticks (and I never do 🙂 ).
- You must be logged in to reply to this topic.