What is a pip in forex? Size, yen pairs and dollar value

What this video covers

The pip explained in three steps: its size on most pairs, the yen-pair exception and its dollar value on standard, mini and micro lots of EUR/USD. It ends with the formula that turns pips into dollars at risk.

Sources and the longer explanation: What Is a Pip in Forex and How Much Is It Worth?.

Numbers shown on screen

• 0.0001: One pip on most currency pairs
• Standard (100,000): $10
• Mini (10,000): $1
• Micro (1,000): $0.10
• 100,000: standard lot
• 10,000: mini lot
• 1,000: micro lot

How the visuals were made

In 0:44 the video moves through 7 scenes, including a side-by-side comparison of Most pairs and Yen pairs; a bar chart, “EUR/USD pip value by lot size”; a worked formula card (Pip value × pips at risk = $ at risk). All graphics were rendered frame by frame by UXS; no stock footage, logos or faces are used.

Chapters

• 0:00 One pip on most currency pairs
• 0:07 Pip size
• 0:12 EUR/USD pip value by lot size
• 0:22 Turning pips into money
• 0:26 Wider stop, smaller position
• 0:33 Lot sizes
• 0:40 Risk note

Transcript

A pip is the standard unit of a currency move: 0.0001 on most pairs.

On pairs quoted in Japanese yen, it is 0.01, the second decimal.

On EUR/USD, one pip is worth about $10 on a standard lot of 100,000 euros, $1 on a mini lot and 10 cents on a micro lot.

Multiply pip value by the pips at risk, and you get dollars at risk.

Pips also connect to risk: the wider your stop in pips, the smaller the position for the same dollar risk.

A mini lot is 10,000 units and a micro lot 1,000, so the pip value falls tenfold at each step down.

Educational only, not financial advice.