A pip, short for "percentage in point" or "price interest point," represents a tiny measure of the change in a currency pair in the Forex market. It can be measured in terms of the quote or in terms of the underlying currency.
A pip is a standardized unit and is the smallest amount by which a currency quote can change. It is usually $0.0001 for US dollar related currency pairs, which is more commonly referred to as 1/100th of 1%, or one basis point. This standardized size helps to protect investors from huge losses. For example, if a pip was 10 basis points, a one-pip change would cause greater volatility in currency values.