What is pip value?
Pip value is the amount of money a position gains or loses when price moves by one pip. Futures traders usually call the same idea tick value. Knowing this number is essential because your stop-loss, target, and risk all convert through pip or tick value.
Pip value formula
Pip Value = Pip Size × Contract Size × Lots × Currency Conversion Rate
Futures use tick size and point value instead. For example, ES moves in 0.25-point ticks and each tick is worth $12.50 per contract. NQ moves in 0.25-point ticks and each tick is worth $5 per contract.
FAQs
Does pip value change?
Yes. If the instrument's quote currency is different from your account currency, the final pip value changes with the exchange rate. That is why the calculator includes a live/manual conversion rate field.
What is the difference between a pip and a tick?
Pip is mostly used in forex. Tick is mostly used in futures and indices. Both are price increments used to calculate money gained or lost on a trade.
How does this help position sizing?
Once you know pip value, you can calculate how much a stop-loss costs. Our lot size calculator does that automatically.