Direct answer
Pip value for USD/SEK is the value of a one-pip price move expressed in your account currency. The core idea is simple: take the pip size in the pair’s quote terms (SEK), multiply by the position size to get the money change in SEK, then convert SEK into your account currency using the appropriate exchange-rate conversion. Because pip size and contract size conventions vary by platform, you must state the assumptions you are using.
Mechanism and definition
A “pip” is a standardized increment in how a quoted FX price changes. For many FX pairs, a pip corresponds to 0.0001 in the quoted price, but you should not assume this without checking your quote convention for USD/SEK. USD/SEK often moves in “whole increments” on many displays, so the effective pip size may differ (for example, 0.01 or 0.1). Treat “pip size” as an input to the calculation.
To calculate pip value you need:
- Pip size in pair price terms (call it (\Delta P)). Example: if one pip is 0.0001, then (\Delta P = 0.0001) in the price format you are using.
- Contract or lot size expressed as base currency units (for USD/SEK the base is USD). Call the trade size (Q_{USD}).
- Quote currency (SEK) because USD/SEK is quoted as USD per SEK? (More precisely: USD/SEK quotes how many SEK for 1 USD. The base currency is USD; the quote currency is SEK.) With USD/SEK, a pip move changes the quote currency amount of SEK per USD.
- Account currency and a conversion rate from SEK into your account currency (if different).
Step 1: compute the pip move in quote terms
For a position of (Q_{USD}) USD, the price (P) is SEK per 1 USD. A pip move changes SEK per 1 USD by (\Delta P). Therefore the pip move in SEK for the whole position is: [ \Delta SEK = Q_{USD} \times \Delta P ] This gives the “pip value” in SEK terms.
Step 2: convert pip value into account currency
Let your account currency be (C). Convert (\Delta SEK) using a conversion rate that matches how (C) relates to SEK. The generic approach is: [ \text{Pip value in } C = \Delta SEK \times \text{(SEK to }C\text{ conversion factor)} ] The exact conversion factor depends on the available market quote format for SEK/C.
If your account currency is SEK
Then the conversion factor is 1, so: [ \text{Pip value in SEK} = Q_{USD} \times \Delta P ]
If your account currency is USD
A pip move changes the SEK value of the USD position. To express this in USD, you convert SEK back to USD. Conceptually: [ \text{Pip value in USD} = (Q_{USD} \times \Delta P) / P ] where (P) is the current USD/SEK price (SEK per 1 USD). This follows because the position’s SEK value is (Q_{USD} \times P), so dividing the SEK change by the SEK-per-USD rate converts it to USD.
If your account currency is neither USD nor SEK
You convert SEK into (C) via an available conversion rate for the path that your platform uses. A common two-leg structure is:
- convert SEK to USD using USD/SEK, then
- convert USD to (C) using USD/(C). In formula form (path-dependent): [ \text{Pip value in }C = (Q_{USD} \times \Delta P) \times \text{(SEK→USD)} \times \text{(USD→}C\text{)} ] If your platform provides direct conversion SEK→C, you can use that instead.
Evidence or example (with explicit assumptions)
Assume these inputs for demonstration only:
- Pip size for USD/SEK is (\Delta P = 0.01) SEK per USD (you must replace this with your platform’s pip definition).
- Position size is (Q_{USD} = 100{,}000) USD.
Example A: pip value in SEK
[ \Delta SEK = 100{,}000 \times 0.01 = 1{,}000\text{ SEK} ] So one pip move is worth 1,000 SEK for this position.
Example B: pip value in USD
Assume current price is (P = ) (SEK per 1 USD). Then: [ \text{Pip value in USD} = \frac{1{,}000\text{ SEK}}{P}] For a numerical result you must insert the actual (P) used at valuation time.