The conversation between human and AI assistant.
What is the difference between a basis point and pip?
Thanks for the explanation. Is a pip always smaller than a basis point?
No, that's not always the case. While a pip is a fixed measure of the smallest price increment in a currency pair, the value of a basis point can vary depending on the price of the financial instrument being measured. For example, if an investment has a value of $100 and increases in value by one basis point, its value will increase by $1, while a 1 pip movement in a currency pair may be worth less than a cent.