Slippage occurs when your order executes at a different, often less favorable, price due to fast markets, low liquidity, or high volatility causing rapid price changes.
Common causes
| Cause | Explanation |
|---|---|
| Fast-moving market | The price changed before the order was executed. |
| Low liquidity | There were not enough buyers or sellers at the expected price. |
| High volatility | Market prices moved sharply during execution. |
| Market unable to fill at expected price | The expected price was no longer available, so the order executed at the next available price. |
Important notes
- Slippage may result in a better or worse execution price.
- A worse execution price is known as negative slippage.
- Slippage cannot be fully avoided and should be considered as part of trading risk.