Calculating the value of one PIP - Aussie Stock Forums

# Thread: Calculating the value of one PIP

1. ## Calculating the value of one PIP

Hi Guys

I understand that EUR/USD, 1 pip is worth \$10, with a lot size of 100,000.

Now, what happens when I buy a lot size of 30,000. What is the value of one PIP.

Is it still \$10 or \$3.33 ? (100,000 / 30,000)

Thanks!

\$3.33

3. ## Re: Calculating the value of one PIP

\$3.00 USD

10,000 GBP/AUD = \$1AUD
100,000 EUR/USD = \$10USD
10,000,000 EUR/JPY = ¥100,000JPY
100,000,000 USD/CHF = 10,000CHF

4. ## Re: Calculating the value of one PIP

Pip stands for "price interest point" and refers to the smallest incremental price move of a currency. Tick size is the smallest possible change in price. Pip value for direct rates are calculated according to the following formula:
Formula: Pip = lot size x tick size
Example for 100,000 GBP/USD contract:
1 pip = 100,000 (lot size) x .0001 (tick size) = \$10.00 USD

5. ## Re: Calculating the value of one PIP

Originally Posted by Page
Pip stands for "price interest point"
I would be interested to know the etymology of "pip" in this context. I think ascribing "pip" as the acronym of "price interest point" is an example of a backronym.

6. ## Re: Calculating the value of one PIP

Originally Posted by Timmy
I would be interested to know the etymology of "pip" in this context. I think ascribing "pip" as the acronym of "price interest point" is an example of a backronym.
More specifically PIP is the smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100 of one percent, or one basis point.

You are right friend PIP is a backronym and it came from the "Price interest point".

7. ## Re: Calculating the value of one PIP

Originally Posted by Page
More specifically PIP is the smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100 of one percent, or one basis point.

You are right friend PIP is a backronym and it came from the "Price interest point".
More copy and paste crap without source, this time taken from investopedia

8. ## Re: Calculating the value of one PIP

Originally Posted by BentRod
More copy and paste crap without source, this time taken from investopedia

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