Trading glossary
Slippage is the difference between an expected trade price and the price actually obtained. Learn what causes it and how it relates to liquidity.
Slippage describes the gap between the price a trader expects when placing an order and the price the order actually receives. It can work in either direction: the final price may be worse than expected, which is the common concern, or occasionally better. Slippage is a normal feature of markets that move continuously rather than standing still between the decision and the fill.
Slippage usually arises from two things: price movement and limited liquidity. In fast-moving markets, prices can shift in the fraction of a second between placing and filling an order. When liquidity is thin, a single order may consume several price levels of the order book, so parts of it fill at progressively less favorable prices. Larger orders in shallow markets tend to see more slippage.
Traders often study liquidity and the order book to anticipate how much slippage an order might encounter. Deeper markets with narrow spreads tend to produce less slippage than thin ones. On Tyrian Trade, this concept appears in educational and analytical contexts. The platform is informational and does not execute trades, so any figures are illustrative rather than actual fills.
Not always. Slippage simply means the fill price differs from the expected price. It is often unfavorable, but prices can also move in the trader's favor between the order and the fill, producing positive slippage.
Thin liquidity, fast price movement, and large order sizes relative to available depth all tend to increase slippage. When few orders sit near the current price, filling an order can reach into less favorable price levels.
They are closely linked. Deeper, more liquid markets can absorb orders with little price change, reducing slippage. In thin markets, the same order may move through several price levels, widening the gap between expected and actual prices.