Pip

A pip ("percentage in point") is the smallest price move a quoted exchange rate can make under standard convention. For most currency pairs the pip is the fourth decimal place (0.0001); for yen-quoted pairs it is the second decimal place (0.01). Pips translate raw price changes into a unit traders can compare across pairs and use to size positions, stop-losses, and rebates. A pipette (fractional pip) is one-tenth of a pip and is shown as a fifth (or third, for JPY) decimal. Most retail brokers quote pipettes for tighter pricing.