What Is a Pip?
A pip (Percentage in Point) is the smallest standardized unit of price movement in a currency pair. For most pairs (like EUR/USD, GBP/USD), a pip is a movement of 0.0001 (the fourth decimal place). For JPY pairs (like USD/JPY), a pip is 0.01 (the second decimal place).
Many brokers now quote prices with an extra digit (called a "pipette" or "point") — the fifth decimal place for most pairs, or third for JPY pairs.
How to Calculate Pip Value
The value of one pip depends on three factors: the currency pair, the lot size, and the exchange rate.
Example: EUR/USD at 1 Standard Lot
- Pip size: 0.0001
- Exchange rate: 1.0800
- Lot size: 1 standard lot = 100,000 units
For pairs where USD is the quote currency (like EUR/USD), the pip value for a standard lot is always approximately $10.
Pip Values for Different Lot Sizes
| Lot Type | Units | Pip Value (EUR/USD) |
|---|---|---|
| Standard | 100,000 | ~$10.00 |
| Mini | 10,000 | ~$1.00 |
| Micro | 1,000 | ~$0.10 |
Why Pip Value Matters
Understanding pip value is essential for:
- Position sizing — You need pip value to calculate the correct lot size. See our Position Sizing Guide.
- Profit/loss calculation — A 50-pip move means different dollar amounts depending on the pair and lot size. Try our Profit/Loss Calculator.
- Comparing spreads — A 2-pip spread on different pairs has different costs.
Pip Value for Different Currency Pairs
| Pair | Pip Size | 1 Lot Pip Value |
|---|---|---|
| EUR/USD | 0.0001 | ~$10.00 |
| GBP/USD | 0.0001 | ~$10.00 |
| USD/JPY | 0.01 | ~$6.50 |
| USD/CHF | 0.0001 | ~$11.30 |
| AUD/USD | 0.0001 | ~$10.00 |
For exact calculations, use our Pip Value Calculator.
FAQ
What's the difference between a pip and a point?
A "point" or "pipette" is 1/10th of a pip — the fifth decimal place for most pairs. When your broker quotes EUR/USD at 1.08001, the final "1" is one point. 10 points = 1 pip.
Is the pip value the same for all brokers?
Yes, pip value is determined by math, not by brokers. However, the exchange rate varies slightly between brokers, causing tiny differences in pip value.