📐 Bond Convexity Calculator
Bond convexity measures how a bond’s duration changes as yields change. Estimate it using prices at shifted yields.
What is bond convexity?
Convexity measures the curvature in the relationship between a bond’s price and its yield. It refines duration-based price estimates, since duration alone assumes a linear price-yield relationship, which isn’t quite accurate for larger yield swings.
How this calculator works
Enter the bond’s current price, its estimated price if yields rise by a small amount, its estimated price if yields fall by the same amount, and the yield change used. The calculator applies the standard approximation formula: Convexity = (P+ + P- – 2P0) / (P0 x Δy^2), and also estimates effective duration from the same inputs.
This is a simplified approximation commonly used in fixed-income analysis for general educational purposes, not investment advice.