Pips

In the Forex market, prices are quoted in pips. Pip stands for "percentage in point" and is the fourth decimal point, which is 1/100th of 1%.

In EUR/USD, a 3 pip spread is quoted as 1.2500/1.2503

Among the major currencies, the only exception to that rule is the Japanese yen. In USD/JPY, the quotation is only taken out to two decimal points (i.e. to 1/100 th of yen, as opposed to 1/1000th with other major currencies).

In USD/JPY, a 3 pip spread is quoted as 114.05/114.08



Calculating a Pip: When USD is the Counter Currency

The value of a Pip is determined by the counter currency:

If the second (counter) currency is USD (e.g. EUR/USD, GBP/USD, AUD/USD)

  • Pips will always be denominated in USD
  • 1 Pip will always equal $10 USD per standard lot size and $1 USD per mini lot

Calculating the value of a Pip when USD is the counter currency:


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