Slippage
Slippage is the difference between the price displayed when an order is placed and the price at which it actually fills.
It happens when the market moves between submitting an order and executing it, or when the depth resting at the requested price is too thin to fill the whole order. Slippage can run against the trader or, less often, in their favour, and it is largest on market orders during fast-moving or thin markets.
This page covers the mechanic; it is not trading advice.
Where the click price and the fill price part ways
A market order promises execution, not price. When a buy Market order on EUR/USD is sent with the ask at 1.0822, the broker fills it at the best price available the instant it arrives. In a calm market that is 1.0822 or within a fraction of a pip. In a fast market the price has already moved, and the fill comes back at 1.0824 or worse. The two-pip gap is slippage.
Slippage has three directions. Negative slippage fills worse than the displayed price and is the common case in volatile conditions. Positive slippage fills better than displayed, which happens when price moves in the order's favour in the moment between click and fill. Zero slippage is the calm-market norm, where enough depth sits at the quoted price to fill the order there. A broker that advertises only the possibility of positive slippage is describing the rare case, not the typical one.
A common assumption is that slippage is a broker charging extra or filling unfairly. On a true market-execution account the fill is the best price the available Liquidity can produce at that instant — the broker is not choosing the price, the book is. Slippage is the cost of demanding immediate execution in a market that is moving or thin, not a hidden fee. The exception is a dealing-desk model where the broker is the counterparty, and there the fill quality depends on the broker's own practices, which is a separate question from market slippage.
One mechanism is worth separating from slippage: the requote. On a market-execution account the order simply fills at the going price and any difference shows as slippage after the fact. On a dealing-desk or instant-execution model the broker can instead reject the request and offer a new price, a requote, which the trader accepts or declines. A requote surfaces the same price movement as a prompt before the fill rather than a silent adjustment after it; market-execution accounts do not requote, they fill and report.
Slippage on a real order
Slippage is widest at the moments a trader is most tempted to act. A worked example: a buy market order on EUR/USD placed at the instant of the US Non-Farm Payrolls release.
Worked example
Fill price − displayed price = slippage- Displayed ask at click
- 1.0822
- Fill price
- 1.0828
- Slippage
- 6 pips
- Position size
- 1 standard lot
Added cost versus displayed
$60
Six pips of negative slippage on entry adds $60 to the cost of the trade on top of the Spread, before the position has moved. The same order placed thirty seconds earlier, before the release, would have filled at or near 1.0822. The slippage is a function of when the order was sent, not of the instrument.
How order type changes slippage exposure
The trade-off is visible in the table. A Market order accepts slippage in exchange for certain execution. A Limit order removes downside slippage by accepting the risk of no fill. A Stop order carries the same slippage exposure as a market order once its trigger fires, which is why a protective Stop-loss can close several pips beyond its level in a fast market.
Estimating slippage before it happens
Slippage cannot be predicted exactly, but its conditions can. It rises with the speed of the market and falls with the depth of the book, so the high-slippage windows are the scheduled releases, the session edges, and the weekend gap between Friday close and Monday open. A position that must be entered or exited in one of those windows can be sized for a worse fill than the screen shows, and a resting stop-loss held through a weekend carries gap risk that no in-session estimate covers.
Related terms
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Common questions
Can slippage ever work in the trader's favour?
Yes. Positive slippage fills better than the displayed price, and it happens when the market moves in the order's direction between the click and the fill. In practice the distribution is asymmetric: the fast conditions that produce slippage are more often the ones that fill a market order worse than displayed, because the same release or thin window that moves price also widens the spread. Positive slippage is real but should not be expected as the typical case.
Can slippage be avoided?
It can be reduced, not eliminated. A limit order removes downside slippage entirely by refusing any fill worse than its price, at the cost of possibly not filling. Trading in deep-liquidity windows such as the London-New York overlap rather than the session edges lowers it. Some brokers offer guaranteed-stop products that close at the exact level regardless of slippage, for a cost charged as a premium or a wider spread depending on the broker. Each of these trades one exposure for another rather than removing the cost.
Is slippage the same as the spread?
No. The spread is the gap between the bid and the ask, paid on every trade regardless of conditions. Slippage is the gap between the price expected at the click and the price actually filled, and it appears only when the market moves or the book is thin between submission and execution. A calm trade pays the spread and no slippage; a trade into a data release pays both.
Does slippage affect limit orders?
Not on the downside. A limit order cannot fill worse than its price, so the negative slippage that hits market orders does not apply. A limit can fill at a better price than requested, a form of positive slippage, if the market trades through the level. What a limit faces instead is non-fill: in a fast market it can be skipped entirely if price gaps past it without trading there.