The Pip Value Formula (with a Worked Example)
Pip value = pip size x contract size x lots, converted to your account currency.
Standard lot = 1.0, mini lot = 0.1, micro lot = 0.01.
Pip distance = |price A - price B| / pip size.
Worked example: on USDJPY at 148.10 a pip is 0.01. Pip value per standard lot = 0.01 x 100,000 / 148.10 = about $6.75, because the yen result is converted back to a USD account at the current price. On EURUSD the same product is 0.0001 x 100,000 = a flat $10, with no conversion for a dollar account.
Pip Size and Pip Value by Instrument
What Is a Pip? (And What Is a Pipette?)
A pip, short for percentage in point, is the standard smallest move most currency pairs are quoted in. For the majority of pairs it is the fourth decimal place, 0.0001, so a move from 1.0850 to 1.0851 is one pip. Yen pairs are quoted to two decimals, so their pip is 0.01. Gold, indices, and crypto each follow their own convention, which the calculator handles per instrument.
A pipette is one tenth of a pip, the fifth decimal place on most pairs and the third on yen pairs. Brokers quote pipettes to price entries and exits more precisely, so a price like 1.08505 carries a pipette. When you count pips for a stop or a spread, count the pip digit and treat the pipette as a fraction of a pip.
Pip Values That Trip Traders Up
Three cases catch traders out. Yen pairs like USDJPY have a smaller pip value than the familiar ten dollars because the yen is the quote currency and the result is divided by the price. Gold is quoted per ounce and brokers disagree on whether a pip is 0.10 or 0.01, so the same stop counted in pips can mean different distances. Indices measure moves in points, not pips, usually around one dollar per point per lot.
Crypto adds another twist: a Bitcoin lot is one coin and a pip is usually a one dollar move, so traders size in fractions of a coin and think in dollars. When in doubt, use the pip distance mode to measure the move straight from two prices, and read the money value the calculator returns rather than assuming ten dollars a pip.
