Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Pip definition

Pip has a particular significance in relation to IG's platform. Here, we define pip in general investing and explain what it means to you when trading with IG.

A pip is a measurement of movement in forex trading, defined as the smallest move that a currency can make.

Usually, a pip is 0.01% of a single unit of currency, or the fourth digit after the decimal point. In EUR/USD, for instance, a move of 1.0001 to 1.0002 would be a single pip move.

This isn't always the case however. Some currencies (such as the yen) delineate a pip as 1% of a single unit of currency. In USD/JPY, a move of 120.01 to 120.02 would be a single-pip move.

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