Investing Trading Forex Trading Calculating the Pip Value for Different Forex Pairs By Cory Mitchell Cory Mitchell Cory Mitchell, Chartered Market Technician, is a day trading expert with over 10 years of experience writing on investing, trading, and day trading for publications including Investopedia, Forbes, and others. learn about our editorial policies Updated on January 5, 2022 Reviewed by JeFreda R. Brown Reviewed by JeFreda R. Brown JeFreda R. Brown is a financial consultant, Certified Financial Education Instructor, and researcher who has assisted thousands of clients over a more than two-decade career. She is the CEO of Xaris Financial Enterprises and a course facilitator for Cornell University. learn about our financial review board In This Article View All In This Article Pip Value Calculation When Trading in a USD Account Pip Value Calculation for a Non-USD Account Pip Value for Other Currency Pairs Frequently Asked Questions (FAQs) Photo: Artifacts Images / Digital Vision / Getty Images In foreign exchange (forex) trading, pip value can be a confusing topic. A pip is a unit of measurement for currency movement and is the fourth decimal place in most currency pairs. For example, if the EUR/USD moves from 1.1015 to 1.1016, that's a one pip movement. Most brokers provide fractional pip pricing, so you'll also see a fifth decimal place such as in 1.10165, where the 5 is equal to five-tenths of a pip, or five pipettes. How much of a profit or loss a pip of movement produces depends on both the currency pair you are trading and the currency you funded your trading account with. Pip value matters because it affects risk. If you don't know how much a pip is worth, you can't precisely calculate the ideal position size for a trade, and you may end up risking too much or too little on a trade. Pip Value Calculation When Trading in a USD Account The most heavily traded currency pairs in the world involve the U.S. dollar (USD). When USD is listed second in a pair, pip values are fixed and don't change if you have an account funded with U.S. dollars. The fixed pip amounts are: USD$10 for a standard lot, which is 100,000 units of currencyUSD$1 for a mini lot, which is 10,000 units of currencyUSD$0.10 for a micro lot, which is 1,000 units of currencyUSD$0.01 for a nano lot, which is 100 units of currency These pip values apply to any pair where the USD is listed second, such as the euro/U.S. dollar (EUR/USD), British pound/U.S. dollar (GBP/USD), Australian dollar/U.S. dollar (AUD/USD), and New Zealand dollar/U.S. dollar (NZD/USD). If the USD isn't listed second: Divide the pip values above by the USD/XXX rate. For example, to get the pip value of a standard lot for the U.S. dollar/Canadian dollar (USD/CAD) when trading in a USD account, divide USD$10 by the USD/CAD rate. If the USD/CAD rate is 1.34105, the standard lot pip value is USD$7.46, or USD$10 divided by 1.34105. Pip Value Calculation for a Non-USD Account Whatever currency the account is funded in, when that currency is listed second in a pair, the pip values are fixed. For example, if you have a Canadian dollar (CAD) account, any pair that is XXX/CAD, such as the USD/CAD will have a fixed pip value. A standard lot is CAD$10, a mini lot is CAD$1, and a micro lot is CAD$0.10. To find the value of a pip when the CAD is listed first, divide the fixed pip rate by the exchange rate. For example, if the exchange rate for the Canadian dollar/Swiss franc (CAD/CHF) is 0.70347, a pip is worth CAD$1.42 for a mini lot (CAD$1 divided by 0.70347). If the pair includes the Japanese yen (JPY)—for example, the CAD/JPY—you must multiply the result by 100 after dividing by the exchange rate. That's because for the yen, a pip is the second place after the decimal (0.01) rather than the fourth (0.0001). For example, if the CAD/JPY is priced at 79.941, to find out the standard pip value, divide CAD$10 by 79.941, then multiply the result by 100, for a pip value of CAD$12.51. Go through this process with any account currency to find pip values for pairs that include that currency. Pip Value for Other Currency Pairs Not all currency pairs include your account currency. You may have a USD account but may want to trade the EUR/GBP. Here's how to figure out the pip value for pairs that don't include your account currency. The second currency is always fixed if a person has an account in that currency. For example, we know that if a person held a GBP account, then the EUR/GBP pip value is GBP10 for a standard lot, as discussed above. The next step is converting GBP10 to your own currency. If your account is in USD, divide GBP10 by the USD/GBP rate. If the rate is 0.77025, then the pip value is USD$12.98. If you can only find a "backward," or reciprocal, quote, such as the GBP/USD rate of 1.3152, then divide 1 by the rate to get 0.76034. That is the USD/GBP rate. You can then do the calculation above. If your account currency is the euro, and you want to know the pip value of the AUD/CAD, remember that for a person with a CAD account, a standard lot would be CAD$10 for this pair. Convert that CAD$10 to euros by dividing it by the EUR/CAD rate. If the rate is 1.48132, the standard lot pip value is EUR6.75. Always consider which currency is providing the pip value: the second currency (YYY). Once you know that, convert the fixed pip value in that currency to your own by dividing it by XXX/YYY, where XXX is your own account currency. Frequently Asked Questions (FAQs) What is a pip in trading? A "price interest point" or "pip" is a small price movement in the exchange rate for a currency pair. For most currency pairs, a pip is .01% (four decimal places right of the whole number). A pip is sometimes the smallest possible price movement, although some brokerages will measure one more decimal place to allow for fractional pip movements. How do you find the pip value for a currency? Your broker is the most reliable source of information about the trading products they offer. Some brokers offer fractional pips ("pipettes"), so you'll want to figure out what the smallest movement is that your broker will measure. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. AVA Trade. "What Is a Pip." OANDA. "Price Interest Point (PIP)." CMC Markets. "What Are Forex Currency Pairs?" Libertex. "What Is a Pip in Forex." TradersDNA. "How to Calculate Cross Rates."