Pips, lots and account currency
Keep base units, quote-currency P&L and account-currency totals separate with a checkable cross-rate example.
Read the currency pair in order
In EUR/USD, EUR is the base and USD is the quote currency. A price of 1.2000 means 1.20 USD per EUR. A position of 10,000 base units therefore refers to 10,000 EUR, not a $10,000 account balance. Multiplying those units by 1.20 would give $12,000 of USD notional at that hypothetical price. The account currency is a separate setting: it determines the unit in which you want the result.
Translate a lot label into units
SanForex defaults to 100,000 base units per lot and lets you change the contract size. Under that convention, 0.10 lot is 10,000 units and 0.01 lot is 1,000 units. Those quantities describe exposure; they do not say what margin is required. Contract size, minimum quantity and volume increments are different specifications. Check all three against the actual instrument, particularly when a platform uses units rather than lots.
Calculate value in quote currency first
For the supported conventional FX pairs, a non-JPY quote normally uses a 0.0001 pip, while a JPY quote uses 0.01. Multiplying base units by pip size gives quote-currency pip value. A 10,000-unit EUR/USD position has a $1 pip value. A 10,000-unit USD/JPY position has a ¥100 pip value. These are different units, so their numeric amounts cannot be compared directly. Extra quote decimals commonly represent fractions of a pip.
Check the direction of the conversion
Use an intentionally simple rate set: one EUR equals 1.20 USD and 180 JPY. That implies 150 JPY per USD. To turn ¥1,000 into USD, calculate 1,000 × 1.20 / 180 = approximately $6.6667. A useful reverse check is $6.6667 × 150 ≈ ¥1,000. To turn 120 USD into GBP when one EUR equals 0.80 GBP, calculate 120 × 0.80 / 1.20 = 80 GBP. These are hypothetical arithmetic examples, not current prices.
Know which changes can alter the output
For a fixed number of base units, quote-currency pip value is constant under the stated pip convention. Its account-currency equivalent changes when the quote-to-account conversion changes. A USD/JPY trade in a USD account therefore does not have a permanently fixed dollar pip value. Entry, close and reference-time conversions can differ; the broker’s applicable conversion and charges determine a real statement result.
Use reference data for its stated purpose
The ECB’s daily rates are informational reference data rather than live bid/ask quotations. SanForex derives cross rates from those EUR-relative inputs and displays their effective date. The converter excludes a provider’s transaction spread or fee. Use a custom conversion rate when you need to model a different date or broker convention, and keep the rate’s units visible. Metals, indices, futures and crypto are not covered by these FX pip assumptions.
Sources and conventions
Examples are hypothetical. Arithmetic follows the formulas documented in our methodology. Broker contract specifications determine actual lot, margin and execution conditions. These sources document definitions and data; a source link does not imply endorsement of SanForex or a trading service.
These materials are prepared with AI assistance and checked against worked examples and deterministic calculation tests where applicable. They are not an expert suitability assessment or investment advice.
Open pip value tool ↗