ForexWhat is a pip? How to calculate pip value
A pip is the standard unit for measuring how far a currency price moves. Knowing what one pip is worth on your trade size is the first step to sizing positions and comparing costs.
What a pip is
For most currency pairs a pip is the fourth decimal place: 0.0001. If EUR/USD moves from 1.1000 to 1.1001, it has moved one pip. For pairs quoted in Japanese yen, a pip is the second decimal place: 0.01.
Most brokers quote one extra digit, called a pipette or fractional pip. A EUR/USD quote of 1.10005 includes half a pip. Spreads such as "0.8 pips" use these fractions.
Pip value by lot size
When the US dollar is the second currency in the pair (the quote currency), pip value in dollars is fixed by your trade size:
The formula
Pip value = pip size × trade size, in the quote currency. To get it in your account currency, convert at the current rate.
USD/JPY at 150.00, one standard lot: 0.01 × 100,000 = 1,000 yen per pip. Divided by 150, that is about $6.67 per pip.
USD/CHF at 0.9000, one standard lot: 0.0001 × 100,000 = 10 francs per pip. Divided by 0.9000, that is about $11.11 per pip.
Pip value on these pairs changes as the exchange rate moves, so platforms recalculate it continuously.
Why pip value matters
Pip value turns a price move into money. A 20-pip stop-loss on one standard lot of EUR/USD risks $200; on a micro lot it risks $2. It also lets you compare costs: a 1.0-pip spread on a standard lot costs $10 each time you open a trade.
Pip value calculator
Enter your trade size and the current rate to see what one pip is worth in US dollars.
Related reading: major, minor and exotic currency pairs and forex order types explained.
Related: see how pip value changes with standard, mini, micro and nano lots.