Finance

What is Pip? Pip is the quoted unit for exchange rate changes. Generally the fourth decimal place. 0.0001 is one pip. Yen is an exception - for Yen, 0.01 is one pip. Because Yen is too small. A pip is a unit of measurement for price movements of currencies in foreign exchange (FX) markets. Pip stands for “percentage in point” or “price interest point.” It represents the smallest price variation that a particular exchange rate experiences based on typical FX market convention. ...

What is bps? BP (or bps) stands for Basis Point. In Chinese, it’s translated to “基点” (jī diǎn). It’s a ratio, meaning one ten-thousandth, which is one hundredth of one percent. Why Do We Need This Concept? Why not just say “one ten-thousandth” and introduce a new term instead? Basis points are convenient and steady. Basis points are less ambiguous than percentages as they represent an absolute, set figure instead of a ratio. ...