In plain English
What Pipette means
If EUR/USD is quoted at 1.08512, the last digit is often a pipette, not a full pip. Pipettes help display finer price movements and tighter spreads. They are a quoting convention, so the exact use can vary by platform and instrument.
Why it matters
Pipettes matter because they improve quote precision and can make spread comparisons more exact. They also affect how you read price changes on platforms that display fractional pips, especially when comparing execution quality across venues.
Example
Simplified example: EUR/USD moves from 1.08510 to 1.08515. That is 0.00005, or 0.5 pip, which equals 5 pipettes. If a quote shows a 1.2-pip spread, the extra precision is being shown in pipettes.
Quick answers
Common questions
Is a pipette always one-tenth of a pip?+
Commonly yes, but you should confirm the quotation convention on the platform because display rules can vary.
Can pipettes affect trading costs?+
Yes. Extra quote precision can reveal small spread differences and slightly different execution prices.
Sources