Pips, pipettes and pip value

A pip (“percentage in point”) is the standard unit of price movement in forex. For most pairs it is the fourth decimal place: if EUR/USD moves from 1.0850 to 1.0851, that is one pip.

For pairs that include the Japanese yen, a pip is the second decimal place: USD/JPY moving from 150.25 to 150.26 is one pip.

Pipettes

Many brokers quote one extra decimal — the pipette, or fractional pip (a tenth of a pip). EUR/USD shown as 1.08505 has that final 5 as a pipette. It allows tighter pricing.

Pip value — what a pip is worth

The money a pip represents depends on your position size. For a standard lot (100,000 units) of a pair quoted in USD, one pip is worth about US$10. Scaling down:

• Standard lot (100,000) → ~US$10 per pip
• Mini lot (10,000) → ~US$1 per pip
• Micro lot (1,000) → ~US$0.10 per pip

So a 50-pip move on one mini lot is about US$50. Knowing pip value is what lets you translate a chart move into real money — and is the basis of position sizing in the Risk Management track.