A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form. Likewise, a fractional basis point like 1.5 basis point is equivalent to 0.015% or 0.00015 in decimal form.
In most cases, basis point refers to changes in interest rates and bond yields.
For example, in March 2017, the Federal Open Market Committee (FOMC) increased the benchmark rates by 25 basis points to a range of 0.75% to 1%. This means that rates were increased by 0.25% percentage points from a range of 0.5% to 0.75%.
In the bond market, a basis point is used to refer to the yield that a bond pays to the investor. For example, if a bond yield moves from 7.45% to 7.65%, it is said to have risen 20 basis points.
The usage of the basis point measure is primarily used in respect to yields and interest rates, but it may also be used to refer to the percentage change in the value of an asset such as a stock. It may be heard that a stock index moved up 134 basis points in the day's trading. This represents a 1.34% increase in the value of the index.
The easiest way to convert basis points into a percent form is by simply taking the amount of basis points and multiply by 0.0001 which will give the percent in decimal form. So if you have to convert 384 basis points into a percent, simply multiply 384 by 0.0001. This will give you 0.0384 which is 3.84% (0.0384 x 100).
This can also be done in reverse to find out the number of basis points that a percent represents by dividing the percent (in decimal form) by 0.0001. For example, say the rate on a bond has risen 2.42%, simply take 0.0242 (2.42% / 100) and divide by 0.0001 to get 242 basis points.
(For more on interest rate changes, see our Bond Basics Tutorial)

Why are bond yields calculated in terms of basis points?
Find out why financial analysts and publications track and quote bond yields in basis points, or bps, rather than simply ... Read Answer >> 
What is the difference between pips, points, and ticks?
Learn the differences between points, ticks and pips and how each are used by investors to measure price changes in stocks, ... Read Answer >> 
What Does it Mean When Someone Says That a Stock Went Up X Points?
For stocks, one point equals one dollar. So when you hear that a stock has lost or gained X number of "points", this is the ... Read Answer >>

Trading
A Common Base for Understanding Changes in Value
A discussion of basis points as well as basis point calculations using Excel. 
Investing
How Points Relate to Financial Instruments
Points usually refer to the measurement of some change in a financial instrument’s value. 
Managing Wealth
What Determines Your Cost Basis?
The cost basis is the initial price paid in an exchange for a product or service. 
Managing Wealth
Cost Basis Basics
The term "cost basis" refers to the original value of a security you own. When you sell a stock, bond or mutual fund, you use the cost basis to determine your profit or loss, which in turn affects ... 
Taxes
A Tax Primer for Homeowners
Go beyond interest and find out how mortgage points affect your taxable income. 
Insights
Fed Hikes 25 Basis Points, Signals Two More Hikes in 2017
As expected the Fed raised the fed funds rate by 25 basis points. 
Trading
Get Positive Results With Negative Basis Trades
Capitalize on the difference in spreads between markets with this popular strategy. 
Investing
Calculating Bond Equivalent Yield
The bond equivalent yield calculates the semiannual, quarterly or monthly yield on a discount bond or note. 
Investing
Understanding Interest Rates, Inflation And Bonds
Get to know the relationships that determine a bond's price and its payout. 
Investing
Global Bond ETFs to Date: 2016 Performance Review (BWX, WIP)
Learn about the yeartodate performance of noteworthy global bond ETFs as of May 2016. Find out which of these ETFs beat the benchmark and which ones lagged.

Basis Point (BPS)
A unit that is equal to 1/100th of 1%, and is used to denote ... 
Price Value of a Basis Point  PVBP
A measure used to describe how a basis point change in yield ... 
Decimalization
A system where security prices are quoted using a decimal format ... 
IRS Publication 551  Basis Of Assets
A document published by the Internal Revenue Service (IRS) that ... 
Points
1. A 1% change in the face value of a bond or a debenture. 2. ... 
Closing Points
Points that are paid at the time of closing of a mortgage transaction. ...