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Definition

Slippage refers to the difference between the expected price of a trade and the actual price at which the trade is executed. This phenomenon can occur in various financial markets, including cryptocurrency exchanges, particularly during periods of high volatility or low liquidity.

Why it matters

• Slippage can impact trading costs, leading to unexpected losses.
• It is a critical factor for traders to consider when executing large orders.
• Understanding slippage helps in assessing market conditions and trade execution strategies.
• It can influence the overall profitability of trading strategies.

Risks & Pitfalls

• Slippage can lead to unfavorable trade execution prices.
• High volatility can exacerbate slippage, increasing trading costs.
• Lack of liquidity may result in significant slippage for large orders.

Examples

No specific examples provided.

Related

No related tokens, chains, or terms available.