Pip

A pip stands for "percentage in point" and it's the smallest price move a currency pair usually makes. For most pairs (like EUR/USD or GBP/USD), one pip is 0.0001 — the fourth decimal place. For yen pairs (like USD/JPY), one pip is 0.01 — the second decimal place, because yen prices are quoted with fewer decimals. Pips are how traders measure everything: profit, loss, stop distance, target distance. When someone says "I made 40 pips," they mean the price moved 40 of those tiny units in their favor. When your broker lists a spread of "0.8 pips," that's the cost of entering a trade. The actual dollar value of a pip depends on your position size and the pair you're trading, but for a standard lot on EUR/USD, one pip is roughly $10.