Forex guide · 5 min read · Updated 8 October 2026

What is a pip?

Pips, pipettes, lot sizes and pip value explained with GBPUSD examples, plus how to work out your position size from your stop.

A pip is the standard unit for measuring how far a currency price has moved. On most pairs, including GBPUSD and EURUSD, one pip is 0.0001, the fourth decimal place. On yen pairs like USDJPY, a pip is 0.01.

If GBPUSD moves from 1.3200 to 1.3215, it has moved 15 pips.

Pipettes

Most brokers quote one more decimal place, for example 1.32153. That last digit is a pipette, a tenth of a pip. So 1.32153 to 1.32168 is 1.5 pips.

Lot sizes

For any pair ending in USD, a standard lot is worth 10 US dollars a pip. If your account is in pounds, divide by the GBPUSD price: at 1.3300, 10 dollars is about £7.52 a pip.

UK spread betting accounts often size in pounds per point instead. On GBPUSD a point is usually a pip, so £5 a point means £5 a pip.

From pips to position size

Professionals don’t choose a lot size first. They choose how much they are willing to lose, then work backwards from the stop:

Lots = money at risk ÷ (stop in pips × pip value per lot)

Example: a £10,000 account risking 1% is £100. With an 8 pip stop on GBPUSD at 1.3300 (£7.52 a pip per lot): 100 ÷ (8 × 7.52) = 1.66 lots. Round down, never up.

Our free position size calculator does this for you with the live GBPUSD price.

Spread is measured in pips too

The spread is the gap between the buy and sell price, and it is your cost on every trade. On GBPUSD it is often under a pip in London hours and wider overnight. With a small stop, a 2 pip spread is a big slice of your risk, which is one reason timing matters.