PIP (Price Interest Point, Percentage In Point)

What is PIP?

PIP (Percentage In Point) is an acronym for percentage in points. One PIP or PIPS represents the smallest possible price change by which the market can move. Most currencies are quoted to the fourth decimal place. The value of a pip varies depending on the volume selected.

PIPs characteristics

PIP is the smallest possible value by which the price of an instrument changes. It is used very often as a point or tick for most currency pairs, being the fourth or second number after the decimal point.

The second number after the decimal point is for the Japanese yen, which is an exception.

What are Partial PIPs

With the development of technology, so-called fractional PIPs were introduced. One fractional PIPs corresponds to the fifth digit after the decimal point for all major currency pairs except the Japanese yen.

The introduction of fractional PIPs has resulted in a significant reduction in transaction costs and a simultaneous increase in turnover, which has proven to be a great success.

Example: when the USD/PLN rate changes from 3.7790 to 3.7791 it rises by 1 pip.