## WHAT IS PIP ?

**What is pip?****Standard Price Quote ( Non-Yen )****Yen Pairs****Pip Value Calculation****Not All Are “Cents”**

Pip since most major **currency pairs** are priced to four decimal places then the smallest change is that of the last decimal point.

For most pairs this is the equivalent of 1/100 of one percent or one basis point.

Therefore the smallest move the USD/CHF currency pair can make is $0.0001, or one basis point.

The smallest move in a currency does not always need to be equal to one basis point, but this is generally the case with most currency pairs.

While It stands for “Percentage in Point”.

**Standard Price Quotes** – Currency Pairs that do not involve the Yen(JPY), have 4 or 5 decimal places

The Yen Price Quote – Currency Pairs involving the Yen(JPY), have 2 or 3 decimal places.

**The Standard Price Quote (Non-Yen)**

The Standard Price Quotes (Non-Yen, 4 decimal places)

The GBP/USD = 1.6411.

Standard Price Quotes (Non-Yen, 5 decimal places)

GBP/USD = 1.63842

**When we look at currency Quote (Price), we see****Cents.****Percentage of a cent****1 tenth of a Percent.**

**Standard Price Quote (Non-Yen).**

In the Price of 1 GBP= 1.63 84 2

**1 = the Dollar****63 = the Cents****84 = the percentage of a cent****2 = the tenth of a Percent**

**Yen Pairs**

**Yen Price Quote ( 2 decimal places)****USD/JPY = 102.33****Yen Price Quote ( 3 decimal places)****USD/JPY = 102.334****In the Price = 102.334****102 = the Yen****33 = the percentage of a Yen****4 = the tenth of a Percent**

**PIP Value Calculation**

**The Standard Price Quote **( where USD Quote Currency)

**GBP/USD****= 1.6413****Formula Percentage of point = Lot Size(100,000) * Tick Size****The Percentage of point =100,000 * 0.00001 = 10 $ per pip value.**

**Standard Price Quote **( where USD Base Currency)

**USD /CAD= 1.1033 Current Price****The Formula PIP = Lot Size(100,000) * Tick Size / Current Price****Percentage of point = 100,000 * 0.0001 / 1.1033 = 9.06 $ per pip value.**

**Standard Price Quote **( where USD not involve)

**EUR/GBP= 0.8308 *** Base Quote EUR/USD = 1.3636****Formula PIP = Lot Size(100,000) * (Tick Size) * (Base Quote ) / Current Price.****The Percentage of point = 100,000 * 0.0001 * 1.3636 / 0.8308 = 16.41 $ per pip value.**

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