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Trading Glossary

Pip

A pip measures the amount of change in the exchange rate for a currency pair, and is calculated using last decimal point. Since most major currency pairs are priced to 4 decimal places, the smallest change is that of the last decimal point which is equivalent to 1/100 of 1%, or one basis point.orex currency pairs are quoted in terms of ‘pips’, short for percentage in points. In practical terms, a pip is one-hundredth of one percent, or the fourth decimal place (0.0001). Currency base pairs are typically quoted where the bid-ask spread is measured in pips.