Slippage is the difference between the price you expected when placing a trade and the price it actually executed at. It happens because prices can move in the brief moment between when you submit an order and when it fills, or because there are not enough orders at your desired price.
Slippage tends to be larger in low-liquidity markets or during periods of high volatility. If you place a sizeable order in a thin market, filling it may require reaching worse prices, moving the average price you pay or receive.
Many exchanges and apps let you set a slippage tolerance, which limits how much difference you are willing to accept. Understanding slippage helps explain why a trade sometimes completes at a slightly different price than the one first shown.
Frequently Asked Questions
What causes slippage?
It comes from prices moving between order placement and execution, or from too few orders at your desired price, which is common in low-liquidity or volatile markets.
Can slippage be limited?
Many platforms let you set a slippage tolerance, which caps how much price difference you will accept. If the trade would exceed it, the order does not go through.
