What is a pip? A pip is the smallest price move in a given exchange rate. Understanding the change in value helps traders to enter, or edit orders to manage their trading strategy.


Currency Pair Exchange Rate at Close Pip Change Trade Amount
EUR/GBP 0.8714 +29 350,000 EUR
Number of GBP per pip: 350,000 × 0.0001 = 35
Per Pip Value: 35 ÷ 0.8714 = 40.17 EUR per pip
Trade Profit / (Loss): 29 pips × 40.17 = 1, 164.93 Euros

Traders often use pips to reference gains, or losses. 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. For a trader to say "I made 40 pips on the trade" for instance, means that the trader profited by 40 pips. The actual cash amount this represents depends on the pip value.

  • For currency pairs displayed to 4 decimal places, one pip = 0.0001
  • Yen-based currency pairs are an exception, and are displayed to only two decimal places (0.01)


OANDA introduced fractional pips, known as "pipettes" to allow for tighter spreads. A fractional pip is equivalent to 1/10 of a pip, making it possible to view the EUR/USD currency pair with pipettes to five decimal places, while currency pairs with the yen as the quote currency to three decimal places. Pipettes are displayed in superscript format in the quote panel.

Pipettes are displayed in superscript format


The monetary value of each pip depends on three factors: the currency pair being traded, the size of the trade, and the exchange rate. Based on these factors the fluctuation of even a single pip can have a significant impact on the value of the open position.

EXAMPLE: Assume that a $300,000 trade involving the USD/CAD pair is closed at 1.0568 after gaining 20 pips. Calculate the profit in U.S. dollars by completing the following three steps:

number 1

Determine the number of quote currency (CAD) each pip represents – Multiply the amount of the trade by 1 pip: 300,000 x 0.0001 = 30 CAD per pip

number 2

Calculate the number of base currency (USD) per pip – Divide the number of CAD per pip (from step 1) by the closing exchange rate to arrive at the number of USD per pip: 30 ÷ 1.0568 = 28.39 USD per pip

number 3

Determine the total profit or loss of the trade – Multiply the number of pips gained, by the value of each pip in USD (from step 2) to arrive at the total loss / profit for the trade: 20 (pips gained) x 28.39 = $567.80 USD profit


For the answer click the + symbol on the left side. Assume all examples are buy transactions.

1. A $350,000 trade involving the EUR/GDP pair is closed at 0.8714 after gaining 29 pips.

Number of GBP per pip: 350,000 × 0.0001 = 35
Per Pip Value: 35 ÷ 0.8714 = 40.17 EUR per pip
Trade Profit / (Loss): 29 pips × 40.17 = 1, 164.93 Euros

2. A $175,000 trade involving the AUD/NZD pair is closed at 1.2703 after loosing 17 pips.

Number of NZD per pip: 175,000 × 0.0001 = 17.5
Per Pip Value: 17.5 ÷ 1.2703 = 13.78 AUD per pip
Trade Profit / (Loss): (17) pips × 13.78 = (-234.26) Australian Dollars

3. Currency Pair: CHF/JPY, Exchange Rate at Close: 83.84, Pip Change: +18, Trade Amount: 500,000 CHF

Number of JPY per pip: 500,000 × 0.01 = 5,000 (Remember, Yen-based currency pairs are an exception and are displayed to only two decimal places)
Per Pip Value: 5,000 ÷ 83.84 = 59.64 CHF per pip
Trade Profit / (Loss): 18 pips × 59.64 = 1,073.52 Swiss Francs

4. Currency Pair: USD/JPY, Exchange Rate at Close: 91.16, Pip Change: -27, Trade Amount: 200,000 USD

Number of JPY per pip: 200,000 × 0.01 = 2,000
Per Pip Value: 2,000 ÷ 91.16 = 21.94 USD per pip
Trade Profit / (Loss): (27) pips × 21.94 = (-592.38) U.S. Dollars


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† Disclaimer:

Execution speed numbers are based on the median round trip latency measurements from receipt to response for all Market Order Fills executed between June 1st and Sept 1st 2016 on the OANDA legacy and OANDA v20 execution platforms, excepting MT4 initiated orders.

Contracts for Difference (CFDs) or Precious Metals are NOT available to residents of the United States.

MT4 hedging capabilities are NOT available to residents of the United States.

The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more information refer to our regulatory and financial compliance section.

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

Trading FX and/or CFDs on margin is high risk and not suitable for everyone. Losses can exceed investment.