Pipette (fractional pip)
A fractional pip, conventionally one tenth of a pip. For EUR/USD this is usually 0.00001 USD per EUR; when JPY is the quote currency it is usually 0.001 JPY per base-currency unit. A platform point and the permitted tick size can follow their own specification, so do not automatically equate them with a pipette. See the lesson on pips and price increments.
Example. EUR/USD moving from 1.10000 to 1.10005 changes by 5 pipettes, or 0.5 pip. With 100,000 EUR of exposure, that corresponds to $5 before costs.
Common mistake: the last digit is not always a pip
Do not count five displayed decimal places as five pip units. Check the instrument specification: JPY quote pairs typically use 0.01 for one pip and 0.001 for one pipette. Other instruments can use different tick conventions.
Apply it
Convert the price difference into pips before using a pip-based spread or stop-distance calculation.
Fractional distances and money
On the stated EUR 100,000 EUR/USD contract, one pipette of 0.00001 represents USD 1; on EUR 10,000 it represents USD 0.10. Five pipettes therefore correspond to USD 0.50 for that smaller position. Convert the units before rounding a cost or stop distance.
FAQ
How many pipettes make one standard pip?
Ten under the fractional-pip convention. EUR/USD 0.00005 is 0.5 pip or five pipettes.
Is the last displayed digit necessarily a pipette?
No. Display precision and price conventions vary; check the exact symbol.
