What is pip value?
We quote currency pairs by "5, 3 and 2" decimal places – also known as fractional pips or pipettes.
- On a 5 decimal place currency pair a pip is 0.00010
- On a 3 decimal place currency pair a pip is 0.010
- On a 2 decimal place currency pair a pip is 0.10
For example: If GBP/USD moves from 1.51542 to 1.51552, that .00010 USD move higher is one pip.
When trading FX and other symbols, there are some easy rules to calculate the ‘pip-value’ of the trade so you can work out your potential gains and losses quickly.
- When trading a ‘spot’ instrument, the pip value will always be in the second quoted symbol on the currency pair – so for EURAUD/USD, this means the pip value will be based in U.S. Dollars. This also applies to commodity pairs such as Gold (XAU/USD) – where the pip value will be based in USD.
- For Indices, the point value will be based in the currency of the country that hosts that stock index; for instance, GER30 is traded in Europe which means that the point value is given in EUR (Euro); US500 is traded in the US, so the point value will be in US Dollars.
A list of all traded symbols and their pip values is shown below. The pip scales in direct proportion to the trade size – so a 2 lot trade will have twice the value per pip as a 1 lot trade.