Calculate the cash value of a pip or point from your pair, lot size and account currency.
How this is calculated
Pip size = 0.0001 for most pairs, 0.01 for JPY-quoted pairs
Units traded = lot size in units × number of lots
Pip value in quote currency = pip size × units traded
Pip value in account currency = pip value in quote currency ÷ quote-to-account exchange rate
Cash risk of a stop = pip value in account currency × stop distance in pips
Worked example
One standard lot (100,000 units) of EUR/USD with a USD account.
Pip value = 0.0001 × 100,000 = $10.00 per pip, so ten pips is $100.00.
A 20-pip stop on that position is 10.00 × 20 = $200.00 of risk.
The same lot on USD/JPY uses a 0.01 pip size: 0.01 × 100,000 = ¥1,000 per pip, which must then be divided by the USD/JPY rate to reach dollars.
Understanding pip and point value
A pip is the conventional smallest quoted increment for a currency pair: 0.0001 for most pairs and 0.01 where the yen is the quote currency. Pip value is what one of those increments is worth in cash for a given position size, and it is the bridge between a stop measured on a chart and the amount of money the stop actually risks.
The arithmetic is linear in position size, which makes the lot conventions worth committing to memory. A standard lot is 100,000 units, a mini lot 10,000 and a micro lot 1,000, so on a pair with a 0.0001 pip and a USD account the pip values are $10.00, $1.00 and $0.10 respectively. Most brokers also quote fractional pips — a fifth decimal place on non-yen pairs, a third on yen pairs — which are one tenth of a pip and affect the spread you pay rather than the pip value itself.
Conversion is where the calculation stops being trivial. When the quote currency is not your account currency, the pip value must be divided by the prevailing quote-to-account rate, and because that rate moves, the pip value of those pairs is not a fixed number. A EUR/USD position held in a USD account has a constant $10 pip; a EUR/GBP position in the same account does not, and the drift is large enough over weeks to make a stop that was sized correctly at entry no longer sized correctly later. The calculator asks for the rate directly rather than fetching it, so the figure is only as current as what you enter.
Yen pairs are the most common source of error. The pip size is 0.01 rather than 0.0001, a hundred times larger, so a position sized by habit on a non-yen pair will risk a very different amount on USD/JPY. The same caution applies to metals and index CFDs quoted by some brokers in "pips" that do not follow the currency convention at all — check the contract specification rather than assuming.
Use the output as the input to sizing rather than as an end in itself. Divide the cash you are willing to risk by the pip value and by the stop distance in pips, and the result is the position size that expresses that risk exactly. Spread, commission and swap sit outside this arithmetic and should be subtracted separately, particularly on short-stop intraday approaches where the spread can be a significant fraction of the intended risk.
Frequently asked questions
What is a pip?
The conventional smallest quoted price increment for a currency pair — 0.0001 for most pairs and 0.01 for yen-quoted pairs.
Why is pip value different across pairs?
Because the quote currency differs. When it is not your account currency, the value must be converted at the current exchange rate.
What is a pipette?
A fractional pip: one tenth of a pip, shown as a fifth decimal place on most pairs.
How does lot size change the value?
Pip value scales linearly with units. A mini lot is one tenth of a standard lot, so its pip value is one tenth as large.