What is a pip?
For most currency pairs a pip is the fourth decimal place: 0.0001. For pairs with the Japanese yen it is the second decimal: 0.01.
| Pair | From | To | Move |
|---|---|---|---|
| EUR/USD | 1.0850 | 1.0870 | 20 pips |
| USD/JPY | 150.20 | 150.70 | 50 pips |
| USD/ZAR | 17.8500 | 17.9000 | 500 pips |
Most platforms show one extra digit (1.08503). That last digit is a point (or pipette): 10 points make 1 pip.
Exotic pairs like USD/ZAR move hundreds of pips a day because each pip is tiny compared with the price. Do not compare pip counts across very different pairs.
What is a lot?
| Lot | Size | Units of the base currency |
|---|---|---|
| Standard | 1.00 | 100,000 |
| Mini | 0.10 | 10,000 |
| Micro | 0.01 | 1,000 |
Gold is different: at many brokers 1.00 lot = 100 ounces. Indices have their own contract sizes. Always check the contract specification in your platform.
How much is one pip worth?
Pip value = pip size × units traded, converted into your account currency.
- 0.0001 × 100,000 = $10 per pip on 1.00 lot.
- 0.10 lots → $1 per pip; 0.01 lots → $0.10 per pip.
- A 30-pip move on 0.10 lots = $30.
- 0.0001 × 100,000 = R10 per pip on 1.00 lot.
- A 200-pip move on 0.50 lots = 200 × R5 = R1,000.
Use the pip value calculator to get the exact value for any pair in USD, ZAR, KES or NGN.
Pips on gold
Brokers do not agree on what a pip is on gold. Many traders count $0.10 as one pip, which makes one pip worth $10 on 1.00 lot of 100 oz. Others talk in dollars: “gold moved $15”. Pick one convention and stick to it in your journal.
Key takeaways
- A pip is 0.0001 on most pairs, 0.01 on JPY pairs.
- 1.00 lot = 100,000 units; 0.01 lot = 1,000 units.
- EUR/USD: about $10 per pip per standard lot.
- Always convert pip value into your account currency.
Do this today
Using the pip value calculator, write down what one pip is worth on 0.10 lots of EUR/USD, USD/JPY and USD/ZAR in your account currency.
Quick quiz
Answer all questions to mark this lesson as complete. Your progress is saved on this device.
Questions people ask
What is the difference between a pip and a point?
A point is one tenth of a pip on platforms that show five decimals (three on JPY pairs).
What lot size should a beginner use?
Whatever keeps your risk at 0.5–1% of your account for your stop distance. The position size calculator works it out.
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Educational content only, not financial, investment or tax advice. Trading forex and CFDs carries a high risk of losing money. Look up any term in the trading glossary.