What is a pipette in forex?
In one line: A pipette is one tenth of a pip. It's the fifth decimal place on most currency pairs, and the third decimal place on yen pairs.
The short answer
Most brokers quote currencies with one extra digit. That last, small digit is the pipette, also called a fractional pip.
Ten pipettes make one Pip.
Where it sits
| Pair | Price | Pip digit | Pipette digit |
|---|---|---|---|
| EUR/USD | 1.08537 | 4th decimal: 3 | 5th decimal: 7 |
| GBP/USD | 1.27412 | 4th decimal: 1 | 5th decimal: 2 |
| USD/JPY | 150.274 | 2nd decimal: 7 | 3rd decimal: 4 |
Many platforms print the pipette smaller or raised, so it stands out.
A simple example
EUR/USD moves from 1.08537 to 1.08612.
Subtract: 1.08612 − 1.08537 = 0.00075.
- In pipettes: 75
- In pips: 7.5
On a Standard lot, a pip is worth $10 on EUR/USD, so a pipette is worth $1. That 7.5-pip move is about $75 per standard lot.
Why it matters
Pipettes make prices more precise. They mostly show up in the Spread.
A spread shown as 0.00012 on EUR/USD is 1.2 pips, not 12. Brokers that quote 5 digits can offer spreads in fractions of a pip, which wasn't possible with 4-digit prices.
Some platforms show distances in "points." On a 5-digit broker, a point is usually a pipette. So "a 200-point stop" can mean just 20 pips.
A common mistake
Counting pipettes as pips. You read 1.08537 to 1.08612 as "75 pips" instead of 7.5. Your stop ends up ten times closer, or your size ten times bigger, than you planned.
The fix: count only to the fourth decimal on most pairs, the second on yen pairs. Then double-check the dollar value with the pip value calculator.
If a platform setting says "points," find out whether it means pips or pipettes before you type a stop distance.
Questions
What is the difference between a pip and a pipette?
A pip is the fourth decimal on most pairs (0.0001). A pipette is the fifth (0.00001), one tenth of a pip.
Why do brokers use pipettes?
They allow more precise prices and tighter spreads. A spread can be 0.8 pips instead of rounding to 1.
Is a pipette the same as a point?
Often, on 5-digit forex platforms. But "point" means different things on different platforms and markets, so check yours.
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