Forex glossary
Pip
Documentation context: Pip size follows the currency pair's convention; cash value requires volume, contract size and any currency conversion.
A pip is a conventional exchange-rate unit, commonly 0.0001 for currency pairs and 0.01 for JPY pairs. It need not be the smallest quoted increment: a pipette is one tenth of a pip. Pip size and cash value depend on symbol, quantity and conversion currency.
Illustrative example
How does it work in practice?
In a hypothetical EUR/USD model, one pip is 0.0001 USD per EUR: a move from 1.1000 to 1.1003 is three pips. For a quantity of 1,000 EUR, one pip is worth 0.10 USD before costs or conversion into another currency.
Pips and pipettes in an EUR/USD quote
Pips, pipettes and platform points
Assumed EUR/USD specification: pip 0.0001; pipette 0.00001; point 0.00001; tick 0.00001 USD per EUR.
On a narrow screen, the table can be scrolled horizontally.
| Term | What it describes | Shared example |
|---|---|---|
| Pip | A conventional rate-movement unit, ten pipettes in this model. | 1.10000 → 1.10010: one pip. |
| Pipette (fractional pip) | One tenth of a pip, not a separate cash amount. | 1.10000 → 1.10001: one pipette, or 0.1 pip. |
| Platform point | The platform display unit; its value comes from the specification. | 1.10000 → 1.10005: five points, or 0.5 pip in this model. |
Takeaway: Point, pipette and tick are equal only under these assumptions. Calculate the price unit and its cash value separately.
Change an assumption, see the result
What changes if…?
Change the EUR/USD move and position quantity. Compare pips with pipettes; pip size in this model is fixed at 0.0001.
EUR/USD model: pip = 0.0001; pipette = 0.00001. Initially one lot is 100,000 EUR. Units per lot, point and tick can be changed separately as exercise assumptions. A fractional tick count means the move is not a multiple of the stated tick. Check actual specifications with the provider. Pip value: USD.
Check your understanding
Separate pip count from cash value using the correct pair’s price unit.
Show the answer and explanation
3 pips and +30 JPY.
The move is 0.03 / 0.01 = three pips. One pip × 1,000 USD gives 10 JPY, so three pips give 30 JPY.
From quotes to position units
Step 5 / 10 · 0 / 10 reviewed
View the full sequence →Progress is saved only in this browser.
Try the numbers in a calculator →
Read the fuller explanation
Related terms
Sources and documentation
- OANDA Corporation: Do you offer micro lots?
OANDA Corporation documentation states the 100,000, 10,000 and 1,000 base-unit convention and distinguishes unit-based from lot-based volume entry.
Document read: - MQL5 Reference: Symbol Properties
Symbol properties distinguish point from tick size and specify contract size, volume steps, and swap calculation units and multipliers.
Document read: - OANDA: What is a pip in trading?
The document explains the 0.0001 pip convention for typical FX pairs, 0.01 for JPY pairs, and a pipette as one tenth of a pip.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.