Basis point
Also written: basis points, bp, bps
One hundredth of one percent. A hundred basis points make one percent.
Finance professionals count in basis points because the sums involved are large enough that a hundredth of a percent still matters. On a hundred billion dollars of sales, one basis point of margin is ten million dollars.
It also removes an ambiguity. If a rate moves "from 3 percent to 4 percent", has it risen by one percent or by a third? Saying it rose 100 basis points settles it.
Apple’s gross margin fell 120 basis points between March and June 2026. That is 1.20 percent of sales, or 1.20 dollars less kept out of every 100 dollars sold.
See also
This definition is part of the EPTA5 lexicon, written so that a reader who does not work in finance can follow our market notes without stopping. It is general information and not investment advice. Read the notes.