Module 2: Pips, lots and leverage · Lesson 7 of 13
Calculating pip value
4 min read
Pip value is how much money one pip of movement is worth for your position. You find it by multiplying the pip size by the number of units traded, which gives a value in the quote currency, then converting it to your account currency if needed.
The basic formula
Pip value (in quote currency) = pip size x position size in units
If the quote currency is the same as your account currency, you are done. If not, convert the result at the current exchange rate.
Pairs quoted in US dollars
For pairs like EUR/USD, GBP/USD or AUD/USD, the quote currency is the dollar.
Example: 1 standard lot of EUR/USD: 0.0001 x 100,000 = $10 per pip. For a USD account, no conversion is needed. A mini lot gives $1 and a micro lot $0.10.
Yen pairs
For pairs quoted in yen, the pip size is 0.01, and the result is in yen.
Example: 1 standard lot of USD/JPY: 0.01 x 100,000 = 1,000 yen per pip. If USD/JPY is trading at, for example, 150.00, convert to dollars by dividing: 1,000 / 150 = about $6.67 per pip.
Because the conversion uses the current rate, the dollar value of a yen pip changes as the price moves.
Other non-USD quote currencies
The same method works for any pair. Calculate in the quote currency, then convert.
Example: 1 standard lot of EUR/GBP: 0.0001 x 100,000 = £10 per pip. If GBP/USD is, for example, 1.2500, a USD account sees 10 x 1.25 = $12.50 per pip. A GBP account would simply see £10.
Example: 1 mini lot of USD/CHF: 0.0001 x 10,000 = 1 Swiss franc per pip. If USD/CHF is 0.9000, that is 1 / 0.90 = about $1.11 per pip.
A quick summary
| Pair | Position | Pip value in quote currency | Approx. in USD (illustrative rate) |
|---|---|---|---|
| EUR/USD | 1 standard lot | $10 | $10.00 |
| USD/JPY | 1 standard lot | 1,000 yen | $6.67 at 150.00 |
| EUR/GBP | 1 standard lot | £10 | $12.50 at GBP/USD 1.2500 |
Most platforms calculate pip value for you, but understanding the maths helps you size trades correctly and check that the numbers make sense.
Key takeaways
- Pip value in the quote currency = pip size x units traded.
- Convert to your account currency when the quote currency differs.
- One standard lot of a yen pair is worth 1,000 yen per pip.
- Pip values for non-USD-quoted pairs change as exchange rates move.
Create a free account to save your progress, take the module quiz and earn a certificate.
Sign up freeEducational content only — not investment advice. Leveraged trading carries a high risk of loss.