A Wealth of Knowledge

A pip is the smallest price move that a given exchange rate makes based on market convention. 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 1%, or one basis point. For example, the smallest move the USD/CAD currency pair usually makes is $0.0001, or one basis point.

« Dictionary