📖 Financial Lexicon Term
What is Pip?
Percentage in Point. The smallest standard price movement in forex. For most pairs, 1 pip = 0.0001. For JPY pairs, 1 pip = 0.01.
Detailed Explanation
A Pip is the standard unit of measurement for changes in value between two currencies. For currency pairs quoted to 4 decimal places, a single pip is exactly 0.0001 (the fourth digit). For Japanese Yen pairs, it is 0.01.
💡 Practical Trading Example
If EUR/USD moves from 1.0850 to 1.0855, the exchange rate has risen by 5 pips.