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Calculating the value of 1 pip
The value of a pip is determined by the pair of currencies being traded, and the rate at which the currency pair is trading. The following currency pairs (where the USD is not the base currency) have a fixed value of $1 per pip: EUR/USD, GBP/USD, AUD/USD, NZD/USD. All other currency pairs have a fluctuating pip value (i.e. USD/CHF, USD/CAD, USD/JPY).
The "Simple Dealing Rates" window allows users to view a little more detailed data for each currency pair. To view the "Simple Dealing Rates" window on the FX Trading Station, simply click on "Action" , choose "Look and Feel" and select "Simple" from the top menu bar. The pip cost column gives you the pip value for each currency in real time.
Currently the value of a pip for USD/CHF is .86. Thus, a 32 pip move would equate to a profit or loss of $27.39 (at the current rate).
To calculate the value of a pip by hand the following formula can be used: .0001* Lot size (for minis its 10,000 units)/current market rate.
Thus the value of one pip for USD/CHF would be calculated by:
.0001 x $10,000/1.557= $.865
Kindest Regards,
Caitlin Harris
Last edited by kokas; 01-12-2007 at 11:46 AM.
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