Make Money

Currencies are quoted using 5 significant digits. The last digit, called a "pip", represents the smallest potential move in an exchange rate, and is very similar to ticks or points in other financial products. In the example below, a 10 pip increase in the Ask price would result in a quote of 1.2287. Likewise, a 10 pip decrease in the Ask price would result in a quote of 1.2267. Half-pips are a more recent development offering traders even tighter spreads and more competitive and transparent accuracy in pricing. When trading foreign exchange, the value of a pip is dependent on two variables – the amount of currency and the currency pair.

USD Value of a Pip

Below, we have calculated the US Dollar value of a 1 pip movement for some of the more frequently traded currency pairs. Please note, all values are calculated using 100,000 units of the base currency (the left-hand currency in the pair).

• EUR/USD = $10.00
• USD/CHF = $8.00
• USD/JPY = $9.06
• GBP/USD = $10.00
• USD/CAD = $7.92
• AUD/USD = $10.00
• EUR/CHF = $8.00
• EUR/JPY = $9.06
• EUR/GBP = $17.98