### Pips

A price interest point (pip) is the most important unit of measurement in currency. It measures the change in the exchange rate for a currency pair.

A pip “Price Interest Point” is one unit of the fourth decimal point in a currency rate. So for dollar currencies, a pip is 1/10.000 of a dollar. GBP/USD = 1.5486, The ‘6’ is the pip.

There is one exception, however. All currency pairs involving the Japanese yen are quoted to only two decimal places (0.01). So one pip in yen pairs is one unit of the second decimal point. This is because the yen is much closer in value to 1/100 of other major currencies. So in the above example, the pip will be ‘4’.

Pips are used as a reference for gains or losses. The actual cash amount a pip represents depends on the pip value, which is different for different pairs. You don’t have to worry about calculating the pips yourself, the broker software will do it automatically.

### Pipettes

A pipette is a fraction of a pip, in fact, it is 1/10 of a pip. GBP/USD= 1.54864, the ‘4’ is pipette.
They appear as the 5th (3rd decimals for yen pairs) in a currency rate.