What Is Slippage? Meaning & Example
Definition
Slippage is the difference between the price you expected and the price your order actually filled at. It is more common in fast or thin markets.
Related terms
A market order buys or sells immediately at the best available price. It prioritizes speed over price, so the final price may differ slightly from the last quote.
LiquidityLiquidity describes how easily an asset can be bought or sold quickly without greatly moving its price. Highly liquid markets have many buyers and sellers and tight spreads.
SpreadThe spread is the difference between the highest price a buyer will pay (the bid) and the lowest price a seller will accept (the ask). Narrow spreads usually mean lower trading costs.
What is Slippage?
Slippage is the difference between the price you expected and the price your order actually filled at. It is more common in fast or thin markets.
Can you give an example of Slippage?
Placing a market order expecting $20.00 and getting filled at $20.06 means 6 cents of slippage.