What a pip is worth in money
What you learn in 3 minutesA pip is the smallest standard step in a price quote, and its cash value is not fixed. The same twenty-pip move can pay ₹20 on one trade and ₹200 on another, because the money value depends on the lot size and on the pair being traded. This lesson works out what one pip is worth in rupees, using USD/INR near 83.2500 as the example.
One pip on USD/INR at three lot sizes
| Step | Amount | Note |
|---|---|---|
| Standard lot (100,000 units) | ₹10 per pip | 100,000 x 0.0001 = 10.00, so one pip is ₹10 |
| Mini lot (10,000 units) | ₹1 per pip | 10,000 x 0.0001 = 1.00, one tenth of the standard lot |
| Micro lot (1,000 units) | ₹0.10 per pip | 1,000 x 0.0001 = 0.10, one hundredth of the standard lot |
| Twenty pips on a standard lot | ₹200 | 20 x ₹10 = ₹200 |
| Twenty pips on a micro lot | ₹2 | 20 x ₹0.10 = ₹2 |
Brokers may round the pip value, quote a slightly different exchange rate at the moment of the trade, or charge a spread and commission on top. The pip value also varies between brokers and between pairs, so the figures here are an illustration rather than a fixed rule.
The mistake people make here
A common mistake is to think of a pip as a fixed amount of money, so a twenty-pip gain feels like the same result every time. In practice the rupee value changes with the lot size, so a trade that looks identical on the chart can be ten or a hundred times larger in cash. Before placing an order, work out the pip value for the lot size being used, then multiply by the number of pips at risk. That single step turns an abstract price move into a number that can be compared with the account balance.Check yourself
A trade on USD/INR uses a mini lot of 10,000 units. The price moves 15 pips in the reader's favour. What is the gain in rupees?
One pip on a mini lot is 10,000 x 0.0001 = ₹1. Fifteen pips is 15 x ₹1 = ₹15.
A standard lot of USD/INR moves 8 pips against the reader. What is the loss in rupees?
One pip on a standard lot is 100,000 x 0.0001 = ₹10. Eight pips is 8 x ₹10 = ₹80.
The same 20-pip move gives ₹200 on a standard lot. What does it give on a micro lot?
A micro lot is one hundredth of a standard lot, so the pip value is ₹10 / 100 = ₹0.10. Twenty pips is 20 x ₹0.10 = ₹2.
In India
- Currency
- Indian rupee, written ₹ (INR)
- Example instrument
- USD/INR, around 83.2500
- One pip on one standard lot of USD/INR
- ₹10, from 100,000 x 0.0001
- Regulator
- SEBI
- Payment methods
- UPI and bank transfer