Pip und sein Wert

It is a universal trading instrument offering a simple method of trading in different markets without physically possessing instruments.

Most currency pairs, like GBP/USD, go out to 4 decimal places. There are some exceptions, like Japanese Yen based currency pairs as well as some commodities such as gold, oil, brent and gas, that are quoted to only 2 decimal points.

Here is an example to figure out what a 1 pip change would look like for GBP/USD pair.

Let’s assume that the currency pair buy price is currently quoted at 1.32711. If the price changes from 1.32711 to 1.32712 that would mean an increase of 1 pip. If the price changes from 1.32711 to 1.32710 that would be a decrease of 1 pip.

A 1 pip move for the USD/JPY pair would be the change from 112.90 to 112.91 because the second decimal point has changed by 1.

As you can see, pip value is expressed in the quote currency (the second currency of the pair).

How to Calculate Pip Value:

The monetary pip value depends on the following three factors:

• the currency pair being traded,
• the size of the trade
• the exchange rate

The calculation of the Pip Value is being made by the following formula:

PIP VALUE = (Pip in decimal places * Trade Size)

Here are the examples of the Pip Value calculation according to the Pip Value Formula: