Pip

A pip is the standard unit of movement in a currency pair: 0.0001 on most pairs and 0.01 on yen pairs.

A pip (short for “percentage in point”) tells you how far an exchange rate has moved. On EUR/USD, GBP/USD or AUD/USD it is the fourth decimal place. On yen pairs such as USD/JPY it is the second.

Thinking in pips rather than in prices lets you compare moves across pairs and reason in terms of risk. A 20-pip stop is the same distance whatever level the market is trading at.

The cash value of a pip depends on your position size and on the quote currency. On 1 standard lot of a dollar-quoted pair, one pip is worth $10; on a micro lot, $0.10.

The full lessonPips, points and ticks: measuring a price moveWhat is a pip in forex, a pipette, an index point or a futures tick? Clear definitions, how to calculate pip value and worked examples you can check.