PIP calculation

Trading Platforms
1

Dear members,

PIP refers to “Percentage in Point”. It will be determined by the digits in the MT5 market details and description.

Example:

  • VL75 digits = 2 => 1 PIP = 0.01

1558×124 13.8 KB

  • EURGBP digits = 5 => 1 pip = 0.00001

1570×96 7.25 KB

  • Digits = 3 => 1 PIP = 0.001

  • Digits = 4 => 1 PIP = 0.0001

Synthetic Indices market

The PIP value will be based on the lot size and contract size, therefore, the equation to calculate PIP value is USD is:

Point value x contract size x lot size

  • Example: We open a 0.5 lot of VL75 => the value of PIP will be:

  • 1 pip = 0.01 for VL75

0.01 (digits = 2) x 1 (contract size) x 0.5 (lot size) = 0.005 USD

Forex market

Depending on the underlying market, the value of the PIP will be in the second currency pair (i.e: GBPJPY, the value of PIP will be JPY) you will have to convert it into USD.

  • Example: we open a 5 lot of GBPJPY => the value of PIP will be:

  • 1 pip of GBPJPY = 0.001

0.001 (digits = 3) x 100000 (contract size) x 5 (lot size) = 500 JPY (will need to convert it into USD)

Hope the information above is insightful for you and happy trading with us :smile:

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