Glossary
Pip
Forex
A pip is the smallest standard price move in a currency pair, equal to 0.0001 for most pairs and 0.01 for yen pairs.
Pip stands for "percentage in point". For EUR/USD a move from 1.0850 to 1.0851 is one pip. Pip value depends on position size and the quote currency: on a standard 100,000-unit lot of a USD-quoted pair, one pip is worth about $10, on a mini lot about $1, and on a micro lot about $0.10.
Brokers that quote a fifth decimal are showing fractional pips (pipettes), where ten pipettes equal one pip. Traders size positions by deciding how many pips of risk a stop-loss allows and dividing the cash risk by the pip value.