What is a pip in forex? How currency moves are measured
By SendPay Business · · 2 min read
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A pip is the small unit used to measure how much an exchange rate moves. Traders, brokers and exchange providers use pips to talk about price changes and spreads.
The size of a pip
For most currency pairs a pip is the fourth decimal place, or 0.0001. If EUR/USD moves from 1.1000 to 1.1005, it has moved 5 pips. For pairs that include the Japanese yen, a pip is the second decimal place, or 0.01.
What a pip is worth
Multiply the pip size by the amount of currency traded. On 10,000 euros of EUR/USD, one pip is worth 10,000 × 0.0001 = 1 US dollar. On 100,000 euros it is worth 10 dollars.
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Pips and spreads
The spread, the gap between the buy and sell price, is often quoted in pips. A spread of 2 pips on EUR/USD means the buy price is 0.0002 above the sell price.
Where SendPay fits
SendPay platforms include currency exchange for customers converting GBP, EUR and USD, powered by licensed partners. SendPay does not offer forex trading or leverage.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.