Lots, Pips and What They Are Worth

Lots, pips, and what one pip is worth in your account currency

Two units you need before anything else makes sense: the lot (how much you are trading) and the pip (how much the price has moved).

Lot size

A standard lot is 100,000 units of the base currency. Most accounts on this platform also allow:

• Mini lot = 10,000 units (0.10 of a standard lot)
• Micro lot = 1,000 units (0.01 of a standard lot)

You can trade in increments as small as 0.01 lots, which is why the position-sizing math in Lesson 4 can land on precise numbers like 0.05 lots rather than being forced into whole lots.

Pip

A pip is the standard unit of price movement — for most pairs, the fourth decimal place (0.0001). EUR/USD moving from 1.0850 to 1.0860 is a 10-pip move. Yen pairs are the exception: because USD/JPY trades around 150 rather than 1.08, a pip there is the second decimal place (0.01).

What one pip is actually worth

This is the number beginners skip, and then get wrong. Pip value depends on lot size and on which currency the pair is quoted in, relative to your account currency.

Worked example — EUR/USD, USD account:

• 1.00 standard lot (100,000 units): 1 pip = $10.00
• 0.10 lot (10,000 units): 1 pip = $1.00
• 0.01 lot (1,000 units): 1 pip = $0.10

So if you open 0.05 lots and the price moves 15 pips in your favor: 0.05 lots is 5 times the 0.01-lot pip value, so 1 pip = $0.50, and 15 pips = $7.50. The same 15-pip move against you loses the same $7.50 — pip value does not care about direction, only about size.

For pairs where the quote currency is not your account currency (for example a USD account trading EUR/GBP), pip value also depends on the current exchange rate of the quote currency, and it changes as that rate moves. Do not estimate this from memory — use the platform's own pip and margin calculator before you size a trade, so the number you plan with is the number that is actually true right now.