Slippage — Trading Wiki

Publisher and editorial transparency

Published by TradeHQ. Site creator: Anuga Weerasinghe. This page has no recorded editorial review date; the About page explains the site's editorial approach.

What Slippage means

Slippage is the difference between a stated reference price and an actual execution price. It can be favorable or adverse; volatile conditions, limited liquidity and delays may increase it.

In depth

Slippage compares an actual execution price with a defined expected or reference price. The comparison requires a side, quantity and timestamp. Paying more than the reference on a purchase is adverse; paying less is favorable. A changing quote, limited available quantity or a delay can contribute to a difference, but a price series alone cannot isolate the cause. A limit price constrains eligible fills and may leave the order unfilled. It does not guarantee both execution and a particular outcome. TradeHQ fills supported market orders at a displayed practice input and does not model actual exchange liquidity.

Key points

• Difference between expected and actual execution price
• Quote changes, liquidity constraints and delays can affect slippage even outside volatile periods
• Limit prices constrain eligible fills but do not ensure execution; market fills can differ from a quote

Why it matters when you are learning

Compare expected and weighted-average fill prices, with fees stated separately. A limit price can constrain execution but may leave the order unfilled; neither order type removes every risk.

Worked exercise and its limits

For an imagined 100-unit buy, a $10.05 fill versus an expected $10 costs $5 more. A $9.98 fill saves $2. Define the reference quote and timestamp; slippage can be favorable or adverse and differs from a separately charged commission.