What is a Pip Value?

Pip Value is used to calculate quickly how much your position P&L would change in case of certain price movements. It shows the position P&L change if the price goes up or down by 1 pip. To solve for the Pip Value, please use the formula below:

Pip Value = Position Volume x Counter Currency 1 pip

As a result, you get 1 pip value in terms of the counter currency.

Example: Position 1 lot of EURUSD. Pip Value = 100,000 x 0.0001 = 10 USD

However, it is more important to know the value denominated in your account currency.

Pip Value in Account Currency = Pip Value / Account Currency-Counter Currency Rate

Example: Position 1 lot of EURJPY. Account Currency: USD. USDJPY rate = 80.00. 

Pip Value = 100,000 x 0.01 = 1,000 JPY. Pip Value in USD = 1,000 / 80.00 = 12.5 USD.