Definition
PipetteA pipette is one-tenth of a pip, the extra decimal place most brokers show in forex quotes: 0.00001 for most pairs and 0.001 for yen-quoted pairs.
Example
If EUR/USD moves from 1.08502 to 1.08507, it has moved 5 pipettes, which equals half a pip.
In detail
Many years ago, most forex prices were quoted to four decimal places (two for yen pairs). As electronic trading made pricing more competitive, brokers began adding a fifth decimal (third for yen pairs) so they could quote finer prices and tighter spreads. That extra digit is the pipette, also called a fractional pip or point.
| Pair | Pip | Pipette | Example quote |
|---|---|---|---|
| EUR/USD | 0.0001 | 0.00001 | 1.08537 |
| USD/JPY | 0.01 | 0.001 | 150.264 |
In the EUR/USD quote above, 1.0853 is the pip-level price and the final 7 is pipettes.
Why it matters
Pipettes cause one of the most common beginner mix-ups: confusing "points" with "pips." Some platforms label the fifth-decimal unit a "point." If you type a stop distance of 50 points into such a platform, that is only 5 pips, which is likely much tighter than you intended.
Pipettes also make spreads more precise. A spread shown as 0.7 pips is 7 pipettes. Without the fifth decimal, the broker would have to round that to 1 pip.
Example
Assume (illustratively) GBP/USD is quoted at 1.26418/1.26431.
- Spread: 1.26431 − 1.26418 = 0.00013
- In pipettes: 13
- In pips: 1.3
On one standard lot, each pipette is worth $1 (one-tenth of the $10 pip value), so this spread costs 13 × $1 = $13.
Quick conversion
- Pipettes ÷ 10 = pips
- Pips × 10 = pipettes
Before you set stops or targets, check whether your platform counts in pips or points. The Pip Calculator works in standard pips, and the What Is a Pip lesson explains decimal places in more depth.
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Related terms
- PipA pip is the standard unit for measuring how much a currency pair's price changes: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.
- SpreadThe spread is the difference between the ask (buy) price and the bid (sell) price of a currency pair. It is a built-in cost paid on every trade.
- Quote CurrencyThe quote currency is the second currency in a forex pair. Prices, pip values and profit or loss on that pair are all expressed in it.
- LotA lot is a standardized trade size in forex. One standard lot is 100,000 units of the base currency; mini and micro lots are 10,000 and 1,000 units.