Pip vs Point
Look-alike pair
Full entries: Pip.
A pip and a point are both units of price movement in trading, but they differ in size: a pip is the standard smallest whole-number increment for most currency pairs, while a point is a smaller fractional unit that depends on the broker's pricing precision. The single difference that matters is that one pip equals a fixed number of points, and that number varies by instrument and broker.
Side by side
| Pip | Point | |
|---|---|---|
| Definition | The standard unit of price change for a currency pair, typically the fourth decimal place (0.0001) for most pairs. | The smallest price increment quoted by a broker, often a fraction of a pip, such as the fifth decimal place (0.00001). |
| Typical size | For most pairs, 1 pip = 0.0001; for JPY pairs, 1 pip = 0.01. | 1 point = 0.00001 for most pairs, or 0.001 for JPY pairs, when brokers use fractional pricing. |
| Relationship | 1 pip equals 10 points on a 5-decimal (or 3-decimal for JPY) pricing feed. | 1 point equals 0.1 pip on a 5-decimal feed; the ratio varies by broker and instrument. |
| Usage | Commonly used to express spreads, profits, and losses in forex trading. | Often used to quote more precise price movements, especially in automated trading and scalping. |
| Field mark | Look for the fourth decimal place in a price quote (e.g., 1.2345); the last digit is the pip. | Look for the fifth decimal place (e.g., 1.23456); the last digit is the point. |
| Variation | The definition of a pip is standard for most pairs, but some brokers use different conventions for certain instruments. | The size of a point varies by broker and pricing precision; always check the broker's specification. |
Which word to use
Use pip when referring to the standard unit of price movement for a currency pair, and use point when referring to the smallest incremental price change quoted by a specific broker or platform.
Family: XI · Look-alikes · Index A–Z