What does the word 'pip' in Forex Trade, mean?
Question:
Answer:
A pip is the smallest price increment in forex trading - pip stands for percentage in point.
Prices are quoted to the fourth decimal point in the forex market - for example EUR/USD might be bid at 1.1914 and offered at 1.1917. In this example we can see that the spread is 3 pips wide. The Japanese Yen (JPY) is an exception - it is quoted only to the second decimal point.
PIP -- price interest point -- one hundredth of a cent.
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