What Is Slippage? Why Did My Order Fill at a Different Price?
Slippage is the difference between an order's final execution price and the price a trader expected or saw when submitting the order. For example, you see a stock quoted at 50 yuan and submit a buy order, but it fills at 50.08 yuan; the 0.08-yuan difference is a straightforward example of adverse slippage. A sale at a higher price or a purchase at a lower price can also result in favourable slippage. Slippage does not necessarily mean the platform made an error; it can result from market-price changes, insufficient order-book depth or the normal execution process. Whether it was reasonable still depends on the order and platform rules.
How Is Slippage Different from the Spread?
The spread is the difference between the bid and ask at the same moment; slippage is the difference between the execution price and the expected price. The spread describes the distance between quotes, while slippage describes a difference between the price before submission and the actual outcome. Both may affect trading costs, but they are not the same thing.
Why Does Slippage Occur?
- Prices keep moving: Market quotes may change between the time you click to submit and when the order reaches the execution venue. Even a brief delay can create a noticeable difference in a fast market.
- Insufficient order-book depth: The quantity available to trade at the current price is limited. A larger order may consume the best level first and fill the remaining quantity at worse prices, producing multiple fills.
- Sudden changes in volatility or liquidity: Major economic data, central-bank announcements, company results, market opens and unexpected events may move quotes quickly or reduce the number of bids and offers.
- Trading hours and market structure: Forex, futures, stocks, CFDs and crypto assets have different trading hours, quote sources and execution mechanisms. Liquidity may thin during off-peak hours, holidays or near the expiry of certain contracts.
- Order size and type: A large market order is more likely to cross several price levels. A limit order can restrict the fill price but may fill only in part or not at all.
Examples Across Markets
Stocks: A stock's best offer is 20.00 yuan, but only 100 shares are available at that level. If you buy 1,000 shares at once, the remaining quantity may fill at higher prices, making the average fill price more than 20.00 yuan. Futures: During a data release, quotes may jump from one level to another with too few orders in between; after a stop is triggered, execution may occur only at the next available price. Forex or CFDs: When quotes move quickly, a market order may be requoted, rejected or filled at an updated available price under the platform's execution policy. Crypto assets: Order-book depth and prices differ among exchanges, and a large order may itself move the market.
Handling is not uniform. Some platforms offer price-tolerance or requote settings; other products execute at the market. Check the relevant order policy and product terms to learn whether partial fills are permitted and how price changes are handled.
Is Slippage Always Adverse?
No. If prices move in a direction favourable to the trader, an order may receive a better fill. In practice, many people mainly notice adverse slippage because an unfavourable outcome is more salient. Assess execution quality using the full set of fills, quantities and prices rather than drawing conclusions from one order. Also remember that a displayed quote may be indicative and may not be the price at which the whole order can be filled.
Trade-Offs Among Market, Limit and Stop Orders
A market order generally prioritises prompt execution at an available price, but does not guarantee a price. A limit order sets a maximum purchase price or minimum sale price, controlling price but possibly not filling. Once a stop order meets its trigger condition, it generally becomes a market order or is executed according to the product's terms, so in a fast market the trigger price may not be the final fill price. Some platforms offer guaranteed stops or other special orders, but conditions, extra costs or product restrictions may apply; do not assume every stop guarantees an execution price.
Practical Ways to Reduce Unexpected Slippage
- Check bid and ask quotes, trading volume and order-book depth. Large orders may be split, but multiple orders can increase timing risk and costs.
- Avoid thin-liquidity periods and major-event windows that you cannot tolerate, especially for fast-moving instruments.
- Choose an order type for its purpose: consider a limit order when price control matters and understand the price uncertainty of a market order when prompt execution matters.
- Before submitting, check quantity, contract specifications, price tolerance and time in force, and confirm how the platform handles partial fills, rejection and requotes.
- Review order confirmations, fill reports and account statements regularly. If a price appears abnormal, promptly save the order ID, timestamp and quote records and contact the provider.
Slippage is part of execution and cannot be eliminated in every situation. A stop order or a particular order type does not mean the market will provide a counterparty at a specified price. Understanding liquidity, the order book and product rules helps set more realistic expectations for order outcomes. This article provides general information and is not investment advice.