A pip is a very small measure of change in a currency pair in the forex market. It can be measured in terms of the quote or in terms of the underlying currency. A pip is a standardized unit and is the smallest amount by which a currency quote can change, which is usually $0.0001 for U.S.-dollar related currency pairs, which is more commonly referred to as 1/100th of 1%, or one basis point. This standardized size helps to protect investors from huge losses. For example, if a pip was 10 basis points, a one-pip change would cause more extreme volatility in currency values.
How much is a pip worth? With this simple trading tool, it will help you determine the exact value of the currency per pip, so that you can better manage your risk per trade. All you need is the currency your account is denominated in, the currency pair you are trading, your position size, and the exchange rate asked to calculate the pip value.