What is a Basis Point?
A basis point represents one gradation on a 100-point scale representing 1%. This term is used especially in expressing variations in the yields of bonds. Fixed income yields vary often and slightly within one percent and the basis point scale easily expresses these changes in hundredths of 1%.
Basis Point Calculator
One basis point is equal to 0.01% or 0.0001. To figure out basis points as a percentage, simply multiply the basis points by 0.01%.
For example, if a stock option is worth $6,000 and increases by 50 basis points, multiply 50 by 0.01% and find the stock has increased by 0.5% or 0.005. Multiply 6,000 by 0.5% or 0.005, to find its value has increased by $30, and is now worth $6,030.