How to calculate pip value for any currency pair

What a pip is

A pip is the standard price step of a currency pair. For most pairs it is the fourth decimal, 0.0001: EUR/USD moving from 1.1050 to 1.1051 is one pip. Pairs quoted in Japanese yen have only two decimals, so their pip is 0.01: USD/JPY moving from 148.50 to 148.51 is one pip.

Most brokers quote one extra decimal, a fractional pip or pipette. EUR/USD at 1.10503 has a pipette of 0.00001, a tenth of a pip. Pip size in Excel: =IF(RIGHT(A10,3)="JPY",0.01,0.0001), which checks whether the quote currency is the yen.

Lot sizes: standard, mini and micro

Positions are measured in lots of the base currency, the first one in the pair. A standard lot is 100,000 units, a mini lot 10,000 and a micro lot 1,000. Brokers usually express size in standard lots, so 0.1 lots is one mini lot and 0.01 lots one micro lot. Units = lots × 100,000.

Worked example: pip values for seven positions

Lot sizes and conversion rates are inputs at the top. Columns C to E use the same formula in every row, only the conversion to USD in column F depends on the pair. The list shows the formulas for each case.

Worked example: pip values for seven positions

	A	B	C	D	E	F
1	Lot sizes and rates	Value
2	Standard lot (units)	100,000
3	Mini lot (units)	10,000
4	Micro lot (units)	1,000
5	USD/JPY	148.50
6	USD/CHF	0.8050
7	GBP/USD	1.3250
8
9	Pair	Lots	Units	Pip size	Pip value, quote ccy	Pip value, USD
10	EUR/USD	1.00	100,000	0.0001	10.00	10.00
11	EUR/USD	0.10	10,000	0.0001	1.00	1.00
12	EUR/USD	0.01	1,000	0.0001	0.10	0.10
13	GBP/USD	1.00	100,000	0.0001	10.00	10.00
14	USD/JPY	1.00	100,000	0.0100	1,000.00	6.73
15	USD/CHF	1.00	100,000	0.0001	10.00	12.42
16	EUR/GBP	1.00	100,000	0.0001	10.00	13.25
17	EUR/JPY	0.50	50,000	0.0100	500.00	3.37
18
19	Using the pip value	Value
20	USD/JPY, 1 lot: gain of 40 pips ($)	269.36
21	Risk per trade ($)	200.00
22	Stop-loss distance (pips)	25
23	EUR/USD position size (lots)	0.80

The exchange rates are made up for practice and brokers may convert at bid, ask or mid. Educational, not trading advice. Leveraged FX trading can lose money fast, and you can lose more than you deposited.

Pairs quoted in USD: EUR/USD and GBP/USD

When the US dollar is the quote currency and your account is in dollars, there is nothing to convert. One standard lot: 100,000 × 0.0001 = $10 per pip. A mini lot is worth $1 per pip and a micro lot $0.10. These values stay the same whatever the exchange rate, which is why $10 per pip is the number most people remember.

USD as the base currency: USD/JPY and USD/CHF

Here the pip value comes out in yen or francs. One lot of USD/JPY: 100,000 × 0.01 = 1,000 yen per pip. One yen is worth 1 ÷ 148.50 dollars, so divide by the rate: 1,000 ÷ 148.50 = $6.73. One lot of USD/CHF: 100,000 × 0.0001 = 10 francs, and 10 ÷ 0.8050 = $12.42.

In one step: pip value in USD = units × pip size ÷ exchange rate. Unlike the USD-quoted pairs, these pip values change whenever the rate moves. If USD/JPY rises, each pip is worth fewer dollars.

Cross pairs: EUR/GBP and EUR/JPY

Cross pairs do not contain the dollar at all, so you need a second rate to convert. One lot of EUR/GBP is worth 10 pounds per pip. One pound is worth GBP/USD = 1.3250 dollars, so multiply: 10 × 1.3250 = $13.25. Half a lot of EUR/JPY is worth 50,000 × 0.01 = 500 yen per pip, and 500 ÷ 148.50 = $3.37.

The rule: find the rate that tells you how many dollars one unit of the quote currency is worth. If USD is that rate's quote currency (GBP/USD), multiply. If USD is its base (USD/JPY), divide. The same logic works for any account currency: an account in euros needs the value of the quote currency in euros.

Using the pip value: profit and position size

Once you know the pip value, profit and loss is simple: pips × pip value. A 40-pip gain on one lot of USD/JPY is 40 × $6.73 = $269.36. The trade profit and loss lab does this for longs and shorts.

The more important use is the other way round: sizing a position from the risk you accept. If you risk $200 on a EUR/USD trade with a 25-pip stop-loss, each pip may be worth at most $200 ÷ 25 = $8, which is $200 ÷ (25 × $10) = 0.8 lots. The position sizing lab builds this into a calculator.

Common mistakes

• Using 0.0001 for yen pairs. USD/JPY, EUR/JPY and every other JPY pair have a pip of 0.01. The wrong pip size makes the pip value 100 times too small.
• Stopping at the quote currency. 1,000 is not your USD/JPY pip value in dollars, it is in yen. Convert to the account currency.
• Multiplying by USD/JPY instead of dividing. One yen is worth 1 ÷ 148.50 dollars. Multiplying gives a pip value of 148,500.
• Counting pipettes as pips. On a five-decimal quote, the last digit is a tenth of a pip. A move of 10 points on the platform is 1 pip.
• Assuming $10 per pip for every pair. That holds only for USD-quoted pairs. USD/CHF, EUR/GBP and the yen pairs differ.
• Using an old rate. Pip values of non-USD-quoted pairs change with the exchange rate. Recalculate before sizing a trade.