Series 34 Exam » Definitions & Terminology » Forex PIPs

Forex PIPs

Forex PIPs

Shorthand for “percentage in point.”  In forex trading, a pip is the smallest incremental movement available in any currency pair.  Most pips are calculated to the fourth place after the decimal point.

NOTE:

Pip value can be either fixed or variable depending on the currency pair.

EXAMPLE:

The pip value for EUR/USD is always $10 for standard lots, $1 for mini lots, and $0.10 for micro lots.

A lot is a standard unit size of a transaction. Typically, one standard lot is equal to 100,000 units of the base currency, 10,000 units if it’s a mini lot, or 1,000 units if it’s a micro lot. Some dealers offer the ability to trade in any unit size, down to as little as 1 unit.

→ HOW TO CALCULATE:

To express the value in the terms currency, multiply 1 pip with the lot value:

EURUSD pip = 0.0001 X 100,000 = $10.00

EURUSD pip = 0.0001 X 10,000 = $1.00

USDCHF pip = 0.0001 X 100,000 = SFr 10.00

USDCHF pip = 0.0001 X 10,000 = SFr 1.00

Study Guide >> Definitions and Terminology >> Forex PIP

Post a Comment

Your email is never shared. Required fields are marked *

*
*