Slippage
Difference between the expected order price and its actual execution price in the market.
Beginner-friendly explanation
Slippage occurs when the price at which your order executes isn't exactly what you expected, often due to a rapidly moving market. Example: You intend to buy Bitcoin at €30,000, but your order executes at €30,100 due to high volatility.
Intermediate-level insight
Slippage frequently occurs with market orders in conditions of high volatility or reduced liquidity. Traders must account for this risk when planning their trades. Example: During major economic news, a market order on ETH may experience significant slippage.
Advanced perspective
Slippage management is critical to advanced and algorithmic trading strategies. Experienced traders use techniques such as fractional execution, limit orders, or sophisticated algorithms to mitigate this risk. Example: A crypto hedge fund employs fractional trading algorithms to minimize slippage on large BTC purchase orders.
Markets & Order Types
slippage, price gap, executed price, volatility, liquidity, market order, execution risk