Pips
A pip is the smallest unit of price that is traded for a currency..
In forex-speak a spread is measured in pips and relates to the difference between the value of the bid and offer. For example, if the Pound Sterling against the US dollar is 1.7443/48, a trader is able to buy the Sterling at the offer price of 1.7448 and sell at the bid of 1.7443. The spread in this example is the difference between the bid and offer, and is five pips.
Most brokers will offer a narrow spread for the most liquid currency pairs - as low as a 2 pip spread for the AUD/USD, EUR/USD and EUR/GBP. In a game where every pip counts, these currency pairs are generally more popular with active or day traders. Less liquid currency pairs such as the USD/CAD (the CAD is the Canadian dollar) will generally incur a wider spread.
.
RELATED TERMS
Free newsletter
Click here to receive TheBull's free newsletters on stocks, trading, investing and more.
- Airbnb, Uber woes show Japan does... 27.06.2018 04:19 PM
- Tokyo's Nikkei index edges down 27.06.2018 04:14 PM
- Air New Zealand fined in Australia... 27.06.2018 04:02 PM
- Hong Kong stocks down at lunch 27.06.2018 03:53 PM
- Twitter to confirm new accounts in... 27.06.2018 03:49 PM
- Canada oil sands plant shut down,... 27.06.2018 12:05 PM
MoreRELATED ARTICLES
Shares rebound at open in Hong Kong, Shanghai
Hong Kong stocks rallied in the first few minutes of trade Tuesday, rebounding from the previous day's losses and tracking New York gains as dealers looked past the collapse of weekend talks to limit oil output.
Making Sense Of The EUR/CHF Relationship
The strong correlation between EUR and CHF currency pairs is undeniable. Find out what it means for forex traders.
The Eurozone Crisis And AAA Ratings
The eurozone's healthier economies' exposure to weaker economies is threatening their coveted AAA ratings.
RESOURCES & OFFERS
Free Investing Newsletter on Asian and Australian markets. Be ahead of the curve with TheBull.
Read more
Join CommSec now and get $600 free brokerage.
Find out more