Slippage

Slippage is the difference between the price an order expects, the displayed quote for a market order or the specified price for a pending order, 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 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

Under market execution, a market order prioritises execution over price. When a buy Market order on EUR/USD is sent with the ask at 1.0822, the broker fills it at the price it sets the instant the order arrives. In a calm market that is 1.0822 or within a fraction of a pip. In a fast market the price may already have moved, in either direction, and the fill comes back away from 1.0822, for example at 1.0824. The two-pip gap is slippage.

Slippage has three directions. Negative slippage fills worse than the displayed price. 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 a fill at the displayed price, which happens when enough depth sits at the quoted price and the price has not moved before the order arrives.

Slippage comes from a price that moves, or depth that runs out, between the click and the fill. Under market execution the broker decides the execution price, and sending the order gives advance consent to it, so any difference from the displayed price shows up as slippage after the fill. How that price relates to the available Liquidity depends on the broker's execution policy. Under instant execution, which the broker sets per symbol, a moved price can produce a requote instead, as the next paragraph describes.

One mechanism is worth separating from slippage: the Requote. Under market execution the order fills at the going price and any difference shows as slippage after the fact. Under instant execution a change within the trader's deviation fills at the new price, and a larger change lets the broker 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 does not requote: it fills and reports.

Slippage in a worked example

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 ask) ÷ pip size = slippage in pips on a buy; (displayed bid − fill price) ÷ pip size = slippage in pips on a sell (a positive result is adverse)

Displayed ask at click: 1.0822
Fill price: 1.0828
Pip size (EUR/USD): 0.0001
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 six pips come from the moment the order was sent: in a calm market the same order fills at the displayed ask or within a fraction of a pip of it.

How order type changes slippage exposure

Slippage exposure follows directly from what each order type guarantees. The market row assumes market execution; under instant execution a market order can be requoted instead of filled.

Order type	What it guarantees	Slippage exposure
Market	Execution priority, not price	Full: fills at the best available price, better or worse
Limit	Price or better	None on the downside: never fills worse than the limit, may not fill at all
Plain stop that submits a market order	Activation under its trigger rules	Fill price can differ from the trigger

The trade-off is visible in the table. A Market order prioritises execution and accepts slippage. A Limit order controls the permitted fill price by accepting non-fill risk. A broker-defined plain Stop order that submits a market order carries slippage exposure after activation; a stop-limit instead controls the permitted price and can remain unfilled.

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 include the scheduled releases, unscheduled news, thin holiday sessions and the weekly reopen, where the weekend Price gap between the weekly close and the first reopening price lands. 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

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 price moves in the order's favour before the fill, down for a buy and up for a sell, provided the broker's execution passes the better price through. Two mechanics push the other way: a spread that widens between the click and the fill, and an order large enough to fill across several price levels, both make the fill worse.

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. Keeping orders away from scheduled releases and thin markets 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 an order expects, the displayed quote for a market order or the order's level for a pending order, and the price actually filled, and it appears only when the market moves or the book is thin before the order executes. A calm trade usually pays the spread and little or no slippage; a trade into a data release pays the spread and is exposed to larger slippage in either direction.

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, when price gaps through the level and the first available price is already better than the limit. What a limit faces instead is non-fill: if price stops short of the level, or only touches it without enough volume trading there to reach the order, the order stays unfilled.