Pipette
Family IV · Costs
Not to be confused with pip.
Pipette is a term for a price increment that is one tenth of a standard pip, also called a fractional pip or a point. It appears as an additional decimal place in a quote, so a price that would be written as 1.2345 with standard pip precision becomes 1.23456 with pipette precision. The pipette itself is not a separate currency unit; it is a finer subdivision of the same exchange-rate movement.[1]
How pipettes relate to pips
For most currency pairs, a standard pip is a movement of 0.0001 in the exchange rate. A pipette is one tenth of that, or 0.00001. For pairs quoted with the Japanese yen as the counter currency, a standard pip is 0.01 and a pipette is 0.001. The pipette therefore represents the fifth decimal place in non-yen pairs and the third decimal place in yen pairs.
Brokers that use pipette pricing display one more decimal than the traditional pip format. The extra digit does not change the underlying value of a position; it only allows finer quoting and narrower spreads to be expressed.
Worked example
A trader watches EUR/USD move from 1.10500 to 1.10530. The change is 0.00030, which equals 3 standard pips or 30 pipettes.
Variations in quoting conventions
Not all brokers or platforms quote in pipettes. Some display only the standard pip decimal, while others show the pipette digit in a smaller font or as a superscript. The number of decimal places shown can also vary by instrument: forex pairs, metals, and indices may each have their own convention. Because these practices differ, the pipette is best understood as a quoting convention rather than a fixed universal unit.
Often confused with
- pip
- A pip is the standard unit of price movement, typically 0.0001 for most currency pairs, while a pipette is one tenth of that amount; the visible sign is the number of decimal places shown in the quote, with pipettes adding one extra digit.
See also
References
- ↑ Contract specifications published by the broker or exchange for each instrument. Lot sizes, tick sizes and pip values are set per instrument and differ between venues; read the specification for the symbol you trade.