What is a basis point? Bps meaning, conversions and a calculator

A basis point (bp, plural bps, often said "bips") is one hundredth of a percentage point: 0.01%, or 0.0001 as a decimal. One hundred basis points make one percentage point. When the US 10-year Treasury yield went from 5.29% to 5.24% on 1 October 2026, it fell 5 basis points.

Interest rates, bond yields, spreads between two rates, fund fees and central bank decisions are all quoted in basis points. This guide covers the conversions, why the unit exists, how to read bps in yields, quotes and fees, and the mistakes that show up in code. The calculator below does the arithmetic for any move.

Basis points to percent and decimal

The only trap in the arithmetic is the decimal. A formula that multiplies by a rate wants 0.0025 for 25 bps, not 0.25 and not 25. Most basis point bugs are a factor of 100 in one direction or the other.

Why markets say basis points instead of percent

The unit exists to remove an ambiguity. When the thing that changes is itself a percentage, "up 1%" can describe two very different moves. Start from a 5.24% yield:

TickerLayer’s bond snapshot returns the move in all three forms, so code never has to guess which one a number is:

{
  "symbol": "US:10Y",
  "rate": 5.24,1
  "unit": "percent",
  "date": "2026-10-01",2
  "timestamp": 1790812800000,
  "prev_rate": 5.29,
  "prev_date": "2026-09-30",
  "change": -0.05,3
  "change_bps": -5,4
  "change_percent": -0.94525
}

change_percent is the field that bites. It answers a question nobody asks about a yield, and in a headline it would turn a 5 bps dip into a 0.95% slide. For rates, spreads and charts, use rate and change_bps.

Basis points in bond yields and spreads

Yields move in small steps, so bond desks talk in bps all day. These are the moves on 1 October 2026 across three government curves, from TickerLayer’s daily yield observations:

A spread between two yields is quoted in basis points too: subtract one yield from the other and multiply by 100. The same day steepened the US curve and pushed France further away from Germany:

The yield curve inversion guide recorded 2s10s at +36 bps on 25 September. By 1 October it stood at +46: ten basis points of steepening in four sessions. Written as "0.10 percentage points" the same move sounds like a rounding error, which is why bond desks call it 10 bps.

What a basis point is worth: DV01

For a bondholder a basis point is money. A bond’s price falls when its yield rises, by roughly its modified duration times the change in yield. The value of a 1 bp move is called the DV01, the dollar value of an 01, or the price value of a basis point.

The formula is a straight-line approximation, and bond prices curve. For a 100 bps rise it predicts −7.71%, while repricing the same bond exactly gives −7.36%. The gap is convexity, and it is why risk systems reprice bonds rather than multiply for large moves. For a few basis points the shortcut is accurate to a rounding error.

Basis points in quotes, fees and loans

Outside bonds, basis points make different prices comparable. A spread or a fee written in bps costs the same fraction of a trade whether the instrument is priced at 1.12 or at 82,000.

• Bid-ask spreadsIn pre-market on 2 October 2026, US:KO quoted 86.25 bid and 86.35 ask: a 10-cent spread, or 11.6 bps of the mid. In regular hours one cent on the same price is 1.2 bps. More in bid-ask spread explained.
• Pips and bpsOne pip on EURUSD is 0.0001 in price, about 0.89 bps at 1.125. The 0.6-pip spread quoted the same morning was 0.53 bps. See what a pip is.
• Fund feesAn expense ratio of 0.03% is 3 bps: $300 a year on $1,000,000. The ETF vs index fund guide puts fees and spreads side by side.
• Central bank movesPolicy rates usually move in steps of 25 bps, sometimes 50 or more. "A quarter point" and "25 basis points" are the same move.
• Credit spreadsCorporate bonds are priced as a spread over government yields: +150 bps means 1.50 percentage points more yield than the matching government bond.
• LoansFloating-rate loans are quoted as a benchmark rate plus a margin in bps. "Plus 200" means two percentage points above the benchmark, wherever the benchmark goes.

Basis points in code

Keep rates in code as numbers in percent, the way the API returns them, and convert to bps only to show a move or a spread. The snapshot already carries change_bps; spreads you build yourself. This script prints the latest move for four tenors and two spreads. It needs pip install requests, a TICKERLAYER_API_KEY environment variable and the Bonds data add-on.

import os

import requests

BASE_URL = "https://api.tickerlayer.com"
HEADERS = {"x-api-key": os.environ["TICKERLAYER_API_KEY"]}


def snapshot(symbol):
    resp = requests.get(f"{BASE_URL}/bond/snapshot/{symbol}", headers=HEADERS, timeout=10)
    resp.raise_for_status()
    return resp.json()


def spread_bps(long_leg, short_leg):
    """Long yield minus short yield in basis points, from observations of the same date."""
    if long_leg["date"] != short_leg["date"]:
        raise ValueError(f"dates differ: {long_leg['date']} and {short_leg['date']}")
    return round((long_leg["rate"] - short_leg["rate"]) * 100, 1)


yields = {symbol: snapshot(symbol) for symbol in ["US:2Y", "US:10Y", "DE:10Y", "FR:10Y"]}
for symbol, snap in yields.items():
    move = "n/a" if snap["change_bps"] is None else f"{snap['change_bps']:+.1f} bps"
    print(f"{symbol:<7}{snap['rate']:>7.3f}%  {move:>10}  {snap['date']}")

print("US 2s10s ", spread_bps(yields["US:10Y"], yields["US:2Y"]), "bps")
print("FR-DE 10Y", spread_bps(yields["FR:10Y"], yields["DE:10Y"]), "bps")

US:2Y    4.780%   -10.0 bps  2026-10-01
US:10Y   5.240%    -5.0 bps  2026-10-01
DE:10Y   3.620%    +2.0 bps  2026-10-01
FR:10Y   4.903%   +15.2 bps  2026-10-01
US 2s10s  46.0 bps
FR-DE 10Y 128.3 bps

Two details in that script are deliberate. spread_bps refuses to subtract yields observed on different dates, because curves do not all publish at once: on the same morning the Spanish 10-year still showed 30 September while the US and German curves showed 1 October. And it rounds, because floating-point arithmetic does not do it for you:

Common basis point mistakes