Slippage
Category: finance
The difference between the expected price of a trade and the price at which the trade is actually executed.
Slippage is the "cost of moving." It happens when the price changes in the split-second between your click and the exchange’s confirmation. It’s worse in fast-moving, low-liquidity markets.
Common Examples
- To avoid slippage during highly volatile market sessions, we utilize limit orders rather than market orders for all our executions.
- Slippage is a hidden trading cost that can significantly erode the profitability of frequent, high-volume day trading strategies.