Pip Value Formula

The Pip Value Formula

A pip (Percentage in Point) is the smallest standard price movement in a trading instrument. Understanding pip value is essential for calculating risk, setting stop losses, and managing position sizes.

Pip Size by Instrument

• Forex Majors (EURUSD, GBPUSD): 1 pip = 0.0001
• JPY Pairs (USDJPY, EURJPY): 1 pip = 0.01
• Gold (XAUUSD): 1 pip = 0.01 ($0.01 per ounce)
• Silver (XAGUSD): 1 pip = 0.001
• Crypto (BTCUSD): 1 pip = 0.01
• Indices (SPX500): 1 pip = 0.01

Worked Examples

Pip Size = 0.0001, Contract = 100,000, Lots = 1.0
Pip Value = 0.0001 x 100,000 x 1.0 = $10.00 per pip per lot

Pip Size = 0.01, Contract = 100 oz, Lots = 1.0
Pip Value = 0.01 x 100 x 1.0 = $1.00 per pip per lot

Pip Size = 0.01, Contract = 1 BTC, Lots = 1.0
Pip Value = 0.01 x 1 x 1.0 = $0.01 per pip per lot

Python Implementation

from gfil_calculators.pip_value import calculate_pip_value

# EURUSD
result = calculate_pip_value("EURUSD", 1.0, "USD")
print(f"1 pip = ${{result['one_pip']}}, 10 pips = ${{result['ten_pips']}}")
# Output: 1 pip = $10.0, 10 pips = $100.0

# XAUUSD
result = calculate_pip_value("XAUUSD", 1.0, "USD")
print(f"1 pip = ${{result['one_pip']}}")
# Output: 1 pip = $1.0