The conversation between human and AI assistant.
What is the difference between a basis point and pip?
Can you explain to me the difference between a basis point and a pip?
Certainly! A basis point is a unit of measure used in finance to describe the percentage change in the value of a financial instrument, such as a stock, bond, or currency. One basis point is equal to one-hundredth of a percentage point, or 0.01%. 
A pip, on the other hand, is a unit of measure used in currency trading to describe the smallest price increment in a currency pair. Depending on the currency pair, a pip can represent a different value. For example, in the Swiss franc/US dollar currency pair, a pip represents a change of 0.0001, while in the euro/US dollar currency pair, a pip represents a change of 0.0001.