What is Slippage?

Slippage refers to the difference between the expected price of a trade and the actual price at which the trade is executed. It commonly occurs in financial markets, especially in fast-moving or illiquid markets.

Slippage can happen for several reasons:

• Market volatility: During periods of high volatility, the price at which a trade is executed may differ significantly from the expected price.
• Liquidity: In markets with low liquidity, there may not be enough buyers or sellers at the desired price level, leading to trades being executed at less favorable prices.
• Order size: Large orders may need to be filled over multiple smaller trades, which can lead to slippage as the market adjusts to each trade.
• Market impact: The act of placing a large order can itself impact the market, causing prices to move against the trader.

There are two kinds of slippage, positive and negative. Positive slippage occurs when the price is executed at a better level than the one requested; a negative slippage is exactly the opposite situation. 

Slippage may occur in all the account types and order types offered and under all execution methods.

Please be informed that in case a slippage is experienced in the market, the orders will be executed at the next available price.

You can decrease the possibility of Slippage by avoiding times that are known to create volatility, such as economic news and economic reports.