Price interest point (pip) - Financial definition
Financial acronyms
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Concise definition of the term price interest point
Term used in the foreign exchange market to refer to the smallest possible increment in an exchange rate between two given currencies. The pip represents one unit of the last quoted decimal place.
Comprehensive definition of the term price interest point
The pip is to the foreign exchange market what the tick is to the equity or listed derivatives market.
For the major listed currencies, the pip is 0.0001. So if the EUR/USD exchange rate goes from 1.2345 to 1.2348, the change will be 3 pips.
Currency pairs including the Japanese yen (e.g. EUR/JPY or USD/JPY) are the main exception to this rule with a pip of 0.01.
Note that on more and more electronic trading platforms used in the markets, prices are now quoted in tenths of pips