# Forex Quote and Pip Value

Pip is short for Price Interest Point, also called points. The most common increment of currencies is the pip. If the exchange rate goes from 1.2576 to 1.2577, that is ONE pip. In mathematical terms, a pip means the last decimal place of a quotation. In a down-to-earth way, the pip is how you calculate your profit or loss. Example: For USD/JPY exchange rate at 120.75 a pip would be 0.01 (the second decimal place).For EUR/USD exchange rate at 1.2385, a pip would be 0.0001 (the fourth decimal place). Each currency has it own value and the pip value is different from one another. It is important to know how to calculate the pip values.

### Pip Value Formula

Pip divided by the exchange rate = pip value

By now you are probably thinking “do I really have to work this hard myself? Can’t someone do these calculations for me”? Good news is that nearly all FOREX brokers will provide you with this information automatically, however it is always a good thing to know how things really work.  So in case you don’t want to waste your time calculating pip value yourself, click here to skip this part and move on to the next chapter. For those who decided to take a peek, let’s go straight to examples before you get a major headache!  First, let’s consider examples where US Dollar appears first, meaning that US Dollar is the base currency.

Examples:

USD/JPY exchange rate at 120.75

STEP1: Figure out what is 1 pip. There are two places therefore 1 pip would be 0.01 (second decimal place)

STEP2: Apply pip value formula to calculate pip value.pip divided by the exchange rate = pip value0.01 divided by 120.75 = 0.0000828

USD/CHF exchange rate at 1.5230

STEP1: Figure out what is 1 pip. There are four places therefore 1 pip would be 0.0001 (fourth decimal place)

STEP2: Apply pip value formula to calculate pip value.0.0001 divided by 1.5230 = 0.0000648

STEP1: Figure out what is 1 pip. There are four places therefore 1 pip would be 0.0001 (fourth decimal place)

STEP2: Apply pip value formula to calculate pip value.0.0001 divided by 1.4590 = 0.0000685

Now let’s consider several examples where the US Dollar does NOT appear first, but you want to calculate US Dollar value anyway. An extra step includes a conversion from base currency value to quote currency value and the conversion formula is

base currency value x exchange rate = quote currency value

EUR/USD exchange rate at 1.2301

STEP1: Figure out what is 1 pip. There are four places therefore 1 pip would be 0.0001 (fourth decimal place)

STEP2: Apply pip value formula to calculate pip value.0.0001 divided by 1.2301 = EUR 0.0000812

STEP 3: Since EUR is the base currency in this example, we got EUR pip value, but we want to know US Dollar value. Therefore, we need to get back to US dollars. To do so, we use conversion formula

base currency value x exchange rate = quote currency value

0.0000812 x 1.2301 = USD 0.0000998

GBP/USD exchange rate at 1.7954

STEP 1: Figure out what is 1 pip. There are four places therefore 1 pip would be 0.0001 (fourth decimal place)

STEP 2: Apply pip value formula to calculate pip value.0.01 divided by 1.7954 = GBP 0.0000556

STEP 3: Get back to US dollars using conversion formula0.0000556 x 1.7954 = USD 0.0000998 top

### FOREX Quote

FOREX means foreign exchange and it is all about buying and selling currencies simultaneously. That being said lets consider a quote example:

You can easily outline the following main things:

• Base currency= EUR
• Bid price = 1.3276
• When selling Euros, 1 Euro =  1.3276 US Dollar
• When buying Euros,  1.3281 US Dollar = 1 Euro
• Spread = 1.3281-1.3276 = 0.0005
• Pip=0.0001

Let’s look at another example and try to outline the main things yourself. No peeking!!!

• Base currency= EUR
• Bid price = 125.96
• When selling Euros, 1 Euro =  125.96 Japanese Yen
• When buying Euros,  126.00 Japanese Yen = 1 Euro
• Spread = 126.00 -125.96 = 0.04
• Pip=0.01
New Brokers

Regulation: ASIC , FCA (UK), FSA (Japan), FSCA (South Africa), FSA (Seychelles), CySEC

Regulation: authorised in seven EU Member States and fifteen jurisdictions worldwide

Unregulated broker

Regulation: Cyprus Securities and Exchange Commission CySEC

Regulation: Financial Conduct Authority FCA
Recent News
Trading financial instruments carries high level of risk to your capital with the possibility of losing more than your initial investment. This site will not be held liable for any loss or damage in result from using the information within the site including forex Broker reviews 2022, market analysis, trading signals, learning resources and comparison tables. The data within this website is not necessarily real-time nor accurate and do not represent the recommendations of the employees. Currency trading is not suitable for all investors. Before deciding to trade currency or any other financial instrument please consider consider your investment objectives, level of experience, and risk appetite. While we do our best to provide up-to-date information, we strongly encourage you to verify it directly with the broker of your choice.