Pip

A pip — short for 'percentage in point' or 'price interest point' — is the smallest standardised unit of price movement in a currency pair in the forex market. For most major currency pairs, a pip is equal to 0.0001 (one-hundredth of one percent) of the quoted currency. For example, if the USD/INR exchange rate moves from 83.2500 to 83.2600, it has moved 100 pips. In USD/JPY pairs, where the Japanese yen is priced to two decimal places, one pip equals 0.01. Pips are used in forex trading to express the profit or loss on a position — for instance, a long USD/INR position that gains 50 pips on a USD 10,000 contract generates a specific rupee profit depending on the pip value. On Indian currency exchanges (NSE, BSE), currency futures are quoted in INR per unit of foreign currency, and tick movements are expressed in paise — the Indian equivalent of pips in domestic currency derivative trading.