Trading glossaryReviewed 16 July 2026
Definition
A pip is a conventional unit for expressing a currency pair’s price change, commonly the fourth decimal place but dependent on the pair’s quotation.
In market context
Pairs involving the Japanese yen commonly use a different decimal convention, and some platforms display fractional pips. The cash value of one pip depends on lot size, pair, exchange rate, and account currency, so identical pip moves can produce different P&L. Pip distance alone does not describe risk unless it is combined with position size, stop behavior, and leverage.
Source
Use the primary source for fuller regulatory or market context.