Pip vs Point vs Tick: What's the Difference?
These three words trip up new traders because they mean different things in different markets. Here's the clean breakdown.
Pip — Forex only
A pip is the smallest standardised price move in forex.
- For most pairs (EUR/USD, GBP/USD): 1 pip = 0.0001
- For JPY pairs (USD/JPY, EUR/JPY): 1 pip = 0.01
Why the difference? Because Japanese yen prices in 1/100ths of a unit, not 1/10000ths.
Pip value (USD account)
- Standard lot (100k units): ~$10/pip
- Mini lot (10k units): ~$1/pip
- Micro lot (1k units): ~$0.10/pip
So a 30-pip win on EUR/USD with a 1-mini-lot position = ~$30 profit.
Pipette / fractional pip
Brokers also quote a 5th decimal (or 3rd on JPY) — that's a pipette, 1/10th of a pip. Useful for tight spreads but most traders track pips.
Point — Stocks and futures
A point is a $1 move in stocks. Or for futures, it's the contract's tick × ticks-per-point. Example:
- AAPL goes from $180.00 to $181.00 → 1 point move
- S&P 500 futures go from 5000.00 to 5001.00 → 1 point = $50 (because each E-mini point is $50)
In conversational use, "point" can also mean a pip in old-school forex slang ("100 points = 100 pips on the pair"). Context matters.
Tick — Futures and price-time series
A tick is the smallest price increment for that specific contract.
- E-mini S&P (ES): 1 tick = 0.25 points = $12.50
- Crude oil (CL): 1 tick = 0.01 = $10
- Gold (GC): 1 tick = 0.10 = $10
In data feeds, "tick data" also just means "every price update", regardless of size.
Quick reference table
| Market | Smallest increment | What it's called | | --- | --- | --- | | Forex majors | 0.0001 | 1 pip | | Forex JPY pairs | 0.01 | 1 pip | | US stocks | 0.01 | 1 cent (move of $1 = 1 point) | | E-mini S&P futures | 0.25 | 1 tick | | Crude oil futures | 0.01 | 1 tick | | Crypto | varies | (no standard — use absolute $ moves) |
How this affects your trades
When a strategy says "place a 30-pip stop", you need to convert that to:
- The right number of price levels on your chart
- The right dollar risk based on your lot size
A 30-pip stop on EUR/USD at 1 mini-lot = ~$30 risk. The same nominal 30-point stop on E-mini S&P futures = 120 ticks × $12.50 = $1,500. Completely different scales.