Pip is the acronym for Price Interest Point, which is the smallest price move that a given exchange rate can make.
Pip Value can be variable or fixed, depending on two factors:
- The currency pair traded, (for example: EUR/USD).
- The base currency, (for example: EUR of the EUR/USD currency pair is the measuring currency).
The Pip Value is also a function of the volume traded. The simplest formula to calculate Pip Value is:
(1 pip / Exchange Rate) * Volume = Pip Value
This number offers The Pip Value in the quoted currency.
If your account’s base currency differs from the quoted currency, simply multiply the quoted currency by the relevant exchange rate.