Premium vs discount, and basis points

A stock token can trade above fair value (a premium) or below it (a discount). Both are measured in basis points. Here is how to read the sign and the magnitude.

Dislocations have a sign and a magnitude, and both matter.

The sign: rich or cheap

A premium (positive) means the pool trades above fair value — the token is rich. Someone is overpaying relative to the underlying stock.
A discount (negative) means the pool trades below fair value — the token is cheap. The on-chain price lags the stock.

On this site, rich reads warm (oxidized copper) and cheap reads cool (verdigris), around a neutral midpoint at zero. It is a measurement scale, not a profit-and-loss color — a premium is not “good” or “bad,” it is simply a direction.

The magnitude: basis points

Premiums are quoted in basis points (bps): 100 bps = 1%. A few real examples from the radar:

GME +246 bps — the token is ~2.5% richer on-chain than the stock is worth.
ORCL +171 bps — a ~1.7% premium.
COIN −97 bps — a ~1% discount; the token is cheap.

Small dislocations (under ~50 bps) are usually noise — inside the pool’s own spread. The board’s default view surfaces the ones large enough to be worth a look, and every number is shown against both the oracle and a live perp so you can tell a tradable dislocation from a structural one.

FAQ

What does a negative premium mean?

A negative premium is a discount — the tokenized stock is trading below its reference fair value. For example, a token at −189 bps is about 1.9% cheaper on-chain than the underlying stock is worth.

What is a basis point?

A basis point (bps) is one hundredth of a percent. 100 bps = 1%. Premiums are quoted in bps because the interesting dislocations are often fractions of a percent, and bps avoids decimal clutter.