Calculating
Profit and Loss in Currency Trading
Our online currency
trading software calculates profit and loss (P&L) for every
currency position in real time. This allows currency traders to
track their gains and losses in real time with every change in the
currency market. The table below was designed to give the currency
trader and idea of the dollar value of a pip for the major currency
pairs. This is provided as a reference only and does not have to
be committed to memory, since the trading software performs the
calculation automatically. Please not that the currency pairs where
the USD is the counter currency have a static pip value (US$10),
whereas the pairs where the USD is the base currency have variable
pip values in terms of the USD (these are
highlighted in red). his Profit and Loss (P&L) for every
position is calculated in real-time on the ACM trading platform.
This enables traders to track their P&L tick by tick as the market
fluctuates.
Approximate
USD Value for a 1 "pip" Move
| Currency |
1
pip |
Contract Size |
Exchange
Rate* |
Value (1 pip) |
| EUR/USD |
0.0001 |
100,000
EUR |
1.1292 |
US$10.00 |
| GBP/USD |
0.0001 |
100,000
GBP |
1.6319 |
US$10.00 |
| USD/JPY |
0.01 |
100,000
USD |
117.82 |
US$8.49 |
| USD/CHF |
0.0001 |
100,000
USD |
1.3736 |
US$7.28 |
| AUD/USD |
0.0001 |
100,000
AUD |
0.6580 |
US$10.00 |
| USD/CAD |
0.0001 |
100,000
USD |
1.3793 |
US$7.25 |
*Prices
taken on 07/11/03
When the USD
is the counter currency, it is easier to calculate the value of
one pip and the pip value is static.
Example of
static pip value:
EUR/USD (using values above) 1 pip = 100,000 EUR x 0.0001 USD
/ EUR = US$10.00
When the USD
is the base currency, an extra step must be performed to convert
the pip value into dollars. This is done by dividing by the current
foreign exchange rate.
Example of
variable pip value:
USD/JPY (using values above) 1 pip = 100,000 USD x 0.01 JPY
/ USD = 1000 JPY / 117.82 JPY/USD = US$8.49
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