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  • Opinions - Not Facts

    This blog consists of contributions from FXCM staff, executives and people that have a relationship with FXCM. In spirit of a blog, the posts are conversational and opinionated. However, they are not official FXCM policy and not double-checked for facts. The authors are providing information that they believe to be true or opinions they hold. To verify information or check official FXCM policy, please contact FXCM through the firm's official website, www.fxcm.com.

    • Fractional Pips

    By Tim Shea | September 21, 2007

    If you trade either demo or live with FXCM, you’ve probably noticed an extra digit in your prices, recently.  That’s because we’ve just started quoting prices out to a further digit.  So, now, instead of seeing a EUR/USD price of, say, 1.3587, you’ll see a price of 1.35874.  I’m so used to seeing prices only quoted in pips, and not tenths of a pip, that it’s been a little tough to adjust.  But, believe me, this is great.

     

    Why?  Lower prices!  Since FXCM has started fractional pips, I’ve seen tighter spreads most of the time.  Like right now, it’s early afternoon in

    New York.  GBP/USD is currently 2.00047/2.00080.  So, my spread is 3.3 pips.  Normally at this time, I’d expect the Ask price to be rounded down (I don’t really expect banks to round in my favor, no matter what the Monopoly Chance Card says) to 2.0004, making the quote 2.0004/2.0008, a 4 pip spread.  So, in buying or selling 1 100k lot of GBP/USD, I’d be losing $33 in spread costs right now.  That’s definitely a lot nicer than $40 in spread costs, which is what the 4 pip spread would be.  Hey, I just saved enough to buy lunch!  OK, working in NYC’s Financial District, that $7 will buy me just a sandwich, but I could use a sandwich.  I never thought talking about pips would make me hungry…


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    Topics: What's New at FXCM | 2 Comments »