For EUR/USD, GBP/USD, AUD/USD, or NZD/USD, a movement of 100 pips would mean a profit or loss of $1,000 per 1 standard lot traded. However, the answer will vary if the US dollar is the base currency, i.e., the first currency. Examples of that are USD/CHF and USD/CAD. Read on for the lowdown on what 100 pips to USD is.
What is 100 pips to USD?
In order to answer this question properly, we need to fully understand how to count pips and what pips are.
A pip is a unit of measurement for recording the change in value between two currencies. For the majority of currencies, a pip is a hundredth of a penny/cent.
We count pips from the fourth decimal place.
For example, let’s say the price for GBP/USD is 1.19300 and it increases to 1.19350.
That’s an increase of five pips.
And if the price decreases from 1.19300 to 1.19050?
That’s a decrease of 25 pips. Easy.
Let’s make a simple example. With a standard 1 lot trade on a forex pair where USD is the quote currency (the second currency), 1 pip is $10. Therefore, a change in price of 100 pips would mean a profit or loss of $1,000 USD.
1 Standard lot trade on an XXX/USD forex pair – 1 pip = $10 USD
To continue this example:
- 100 pips on a 0.1 lot trade is $100.
- 100 pips on a 0.01 lot trade is $10.
Of course, many brokers offer mini and micro accounts. On a mini account, where 1 lot means 10,000 units and USD is the quote currency, this means the following:
- 100 pips on a 1 lot trade is $100
- 100 pips on a 0.1 lot trade is $10
- 100 pips on a 0.01 trade is $1
And on a micro account:
- 100 pips on a 1 lot trade is $10
- 100 pips on a 0.1 lot trade is $1
- 100 pips on a 0.01 lot trade is $0.10
How to work out the value of a pip
Of course, it’s very easy to answer what is 100 pips to USD when USD is the quote currency because it so clearly and obviously correlates to the lot size.
However, things are obviously a little different when USD is the base currency, i.e., the first currency.
Fortunately, it’s not that difficult. In order to find the answer, simply divide 0.0001 by the exchange rate, and then multiply this figure by the amount of units you are trading. Not the lot size, but the amount of individual units.
Let’s say, for example, USD/CHF.
The exchange rate is 0.96393.
0.0001 divided by 0.96393 is 0.00010374197.
And let’s say we are trading one standard lot, so 100,000 units.
0.00010374197 multiplied by 100,000 is 10.374197.
Therefore, at the time of writing, a one lot trade of USD/CHF gives us a pip size of $10.37. And so, 100 pips to USD would be just over $1037.
What is 100 pips to USD – Japanese Yen
When it comes to the Japanese Yen, we count pips a little differently.
Instead of counting from the fourth place after the decimal point, we count from the second.
So, using USD/JPY as an example, an increase in the exchange rate from 136.67 to 136.89 would be an increase of 22 pips.
And an increase from 136.67 to 137.67 would be an increase of 100 pips.
So, because we count from the second place after the decimal point, in order to work out 100 pips to USD with Japanese Yen, we divide 0.01 by the exchange rate, and then multiply this figure by the amount of units being traded.
So, 0.01 divided by 136.67 is 0.00007316894.
And it’s a standard one lot trade, so we multiply 0.00007316894 by 100,000.
This gives us a figure of 7.316894.
On this trade, 1 pip is $7.32 USD. And of course, 100 pips to USD would be just over $732.
Pip calculator tool
As you can see, it’s very easy to work out the value of a pip It only takes two really simple calculations. Plus, it’s also really important to be able to do sums like this, because calculations like this are critical for things like money and risk management.
However, if you’re in a hurry, CashBackForex.com has a fantastic little tool that will calculate the value of a pip or pips for pretty much any forex pair you can think of. Check it out below.