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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
When you get a different price than expected, usually in fast-moving markets.
Why It Matters
Slippage is the gap between the price you expected and what you actually got. In calm markets on liquid stocks, slippage is pennies. During a market crash or on a thinly traded stock, slippage can be dollars per share. This hidden cost eats into returns, especially for frequent traders. Limit orders help avoid slippage but might not fill.
Key Points
- Worst during: high volatility, low liquidity, large orders, market opens and closes
- Positive slippage exists too: sometimes you get a better price than expected
- Use limit orders when slippage risk is high - you control the price, even if you might not get filled
Related Terms
Common Questions
When you get a different price than expected, usually in fast-moving markets. Slippage is the gap between the price you expected and what you actually got. In calm markets on liquid stocks, slippage is pennies.
Slippage is the gap between the price you expected and what you actually got. In calm markets on liquid stocks, slippage is pennies. During a market crash or on a thinly traded stock, slippage can be dollars per share. This hidden cost eats into returns, especially for frequent traders. Limit orders help avoid slippage but might not fill.
Worst during: high volatility, low liquidity, large orders, market opens and closes
Positive slippage exists too: sometimes you get a better price than expected
Use limit orders when slippage risk is high - you control the price, even if you might not get filled