What is a Pip?
A pip (percentage in point) is the smallest standard price movement in a currency pair. For most pairs, a pip is the fourth decimal place — 0.0001. For JPY pairs (like USD/JPY), a pip is the second decimal place — 0.01.
Example: If EUR/USD moves from 1.08500 to 1.08510, it has moved 1 pip (0.00010). If it moves from 1.0850 to 1.0900, it has moved 50 pips.
How to Calculate Pip Value
Pip value depends on three things: the currency pair, your lot size, and your account currency. Here's the formula:
Pip Value = (Pip Size ÷ Exchange Rate) × Lot Size
For EUR/USD (1 standard lot = 100,000 units):
Pip value = (0.0001 ÷ 1.0850) × 100,000 = $9.22
For USD/JPY (rate ~148.00):
Pip value = (0.01 ÷ 148.00) × 100,000 = $6.76
Lot Sizes and Pip Values
| Lot Type | Units | Pip Value (EUR/USD) |
|---|---|---|
| {lt} | {u} | {pv} |
Use our free pip calculator to get exact values for any pair, lot size, and account currency instantly.
⚠ Note: Pip values change as exchange rates change. Always recalculate when rates have moved significantly.
Common Questions
FAQ
What is a pipette?+
A pipette is a fractional pip — one-tenth of a pip (the 5th decimal place for most pairs). Many brokers now quote to 5 decimal places for more precise pricing.
Is a pip always $10?+
No — pip value depends on your lot size and the exchange rate. A standard lot is approximately $10/pip for USD-quoted pairs. Mini lots are $1/pip, micro lots $0.10/pip.
How do I calculate pip value for JPY pairs?+
For JPY pairs, the pip is the second decimal place (0.01, not 0.0001). Use: (0.01 ÷ rate) × lot size. Our pip calculator handles all pairs automatically.
Why do pip values matter?+
Pip values are essential for position sizing. If you want to risk $100 on a 20-pip stop-loss, you need a position size where 20 pips = $100 — which means $5/pip, or a mini lot equivalent.