why does the pip difference change in forex market?

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why does the pip difference change in forex market?
i’m new to the forex market, and i noticed over many days that the difference between the pips of USD/JPY is different on some days. usually the difference between pips is 2 and some days its 4 or 5. why does that happen?

Best answer:

Answer by OPM
In the United States, the FOREX market is a dealer market. If customers are taking all of the risk, then the pip difference can be small, but if dealers have to put their own money up, they will put a spread in the pips so they are not taking any risk in the transaction, the entire risk falls on the customers. It gives you a signal as to how liquid the market currently is.

Do note that in the United States, a FOREX dealer can quote any amount they wish without limitation. If a pip change could trigger a profitable margin call, they have been known to do that just for the commissions and to balance their risk book.

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  1. UrikaDotBiz (December 22nd, 2013 at 7:59 pm)

    That depends on the broker. You must be looking at the rates through different brokers sites,

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