Pip value

Pip value turns a pip, the standard price step, into money. The pip lesson works it out on three instruments, and the lot size lesson uses it to size trades from risk.

How to calculate pip value

Pip value = pip size × units traded

The answer comes out in the quote currency, so convert it at the current rate if your account uses another currency.

Here is a worked example for one standard lot in a USD account, with round illustrative prices:

1. EUR/USD: 0.0001 × 100,000 = $10.
2. USD/JPY at 150.00: 0.01 × 100,000 = 1,000 yen, and 1,000 ÷ 150.00 = $6.67.

Pip value scales in a straight line with size: 0.10 lot of EUR/USD is $1 per pip and 0.01 lot is $0.10. The pip value calculator handles other pairs and account currencies.

Using pip value to size a trade

Pip value links your stop distance to the money you put at risk:

Lots = money at risk ÷ (stop distance in pips × pip value per lot)

With $20 at risk and a 25 pip stop on EUR/USD, that is $20 ÷ (25 × $10) = 0.08 lot. To check: 0.08 lot is $0.80 per pip, and 25 × $0.80 = $20.