What Is a Pip? Definition, Formula and Examples | Borearis
A pip is the standard smallest move in a currency pair. For most pairs it is 0.0001; for yen pairs it is 0.01.
The formula
Pip value = pip size × contract value per lot × lots. One pip on one EUR/USD lot is 0.0001 × 100,000 = 10 US dollars.
Why it matters
Your stop is measured in pips, and your risk is measured in money. Pip value is the bridge between them: risk ÷ (stop in pips × pip value) gives the lot size.
Gold and indices
Gold is usually quoted to two decimals and one lot is 100 ounces, so a 0.01 move is one dollar per lot. Index CFDs vary by broker; check the contract specification.
Try it
Use the pip value calculator for the exact number, then the position size calculator to turn it into lots.
How much is one pip on EUR/USD?
Ten US dollars per standard lot, because one lot is 100,000 units and one pip is 0.0001.
What is a pipette?
A pipette is one tenth of a pip, used by brokers that quote an extra decimal, such as 0.00001 on EUR/USD.
Educational content only, not investment advice.