Pip Value Calculating
Pip value = (Contract size x Lot) x 10^-digit ) / exchange rate
whereas,
- Exchange rate must convert to account currency
- Contract size : 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