Pipette
A tenth of a pip: the fifth decimal place on most currency pairs (0.00001) and the third on yen pairs (0.001). Also called a fractional pip.
Most brokers now quote currency pairs to one more decimal than the traditional pip. That extra digit is the pipette, or fractional pip.
- EUR/USD quoted as 1.08523: the "3" is pipettes. The pip digit is the "2".
- USD/JPY quoted as 150.237: the "7" is pipettes.
Fractional pricing lets brokers quote tighter, more precise spreads. A spread of 0.3 pips would be impossible to show with four-decimal quotes.
Example
Illustrative quote: EUR/USD bid 1.08521, ask 1.08529. The difference is 0.00008, which is 8 pipettes or 0.8 pips. On a standard lot, where 1 pip is worth 10 dollars, that spread costs 8 dollars to cross.
If price moves from 1.08521 to 1.08584, that is 63 pipettes, or 6.3 pips.
Common confusion: "points"
MetaTrader settings, such as stop levels, slippage tolerance and some expert advisors, often measure distance in "points", which on a five-digit quote means pipettes. So a 50-point stop is a 5-pip stop, not a 50-pip one. Misreading this is a classic way to set stops ten times too tight or too wide. Always check whether a figure is in pips or points.
Our guide to reading a forex quote explains quote formats in more detail.
Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning