Pips and Pipettes
Contrary to what scammers will have you believe, currency rates don’t make drastic moves. Even when a trend forms, usually the upward or downward move is gradual and incremental. To measure these minor moves traders use measures of pips and pipettes.
Pip
A pip is a small incremental move an exchange rate can make. A pip is 1/100th of 1%.
It is sometimes considered to be the smallest and that is not wrong because usually currency rates are measured up to 4 decimal places. However, technically there is one smaller still and it’s called the pipette.
Pipette.
A pipette is a fractional pip and falls on the third or fifth decimal place. It is not as commonly used to quote exchange rates.
The standard unit for measuring exchange rates is pip.