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Pips, Spread and Margin

What is a Pip?

The digits after the decimal point are called pips (“price interest points”) and they measure the change in the exchange rate for a particular currency pair. To be exact, 1 pip is the difference in price of a one thousandth in any currency pair.

What is a Spread?

The difference between a bid and offer price is called a spread. This is simply the difference between the best price that you can currently buy or sell a given currency pair at that current point in time.

So in the example of EUR/USD1.18000/1.18007 the spread is 0.7 pips.

Margin or leverage

Margin, or leverage, means that you only need to hold a proportion of your overall exposure to the market when you open a trade. For example you might buy $1,000,000 against the Australian Dollar without requiring this full amount on your trading account. Instead you are required to put down a percentage of this amount, a percentage dictated by the leverage or margin settings of your trading account.

Live Prices

Below is a list including Live Forex prices of the most traded currencies (‘the majors’).

 


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