Fractional Pips
Pips (minimum price movements) will be changing to be 10 times more precise as they were previously. With fractional pip pricing, you gain an extra digit of precision so that you can take advantage of smaller price movements.
Here’s an example:
Currently a Forex pair may quote at a static 3 pips. That is a 3 minimum price movement difference. With fractional pips, and assuming the same spread, there would be 30 price movements between the "bid" and the "ask." This combined with the changes to the commission model and the pip spreads, we could now expect to see spreads as tight as 1.0 to 2.0 pips where we previously saw static 3 pip spreads. |