Pip Value Calculating
Pip value = (Contract size x Lot) x 10^- digit ) / exchange rate
whereas,
- The exchange rate must convert to account currency.
- Contract size: The size of the contract
- Lot size: Investment unit
- Digit: Point value unit
Example
BUY USDJPY 0.05 Lot, Contract Size 100,000, Digit 3, Exchange rate USDJPY 145.18
Pip Value = ((100,000 x 0.05) x (10^-3))
= 5 JPY
= 5 JPY / 145.18
= $0.034