Slippage
trading
The difference between the expected trade price and the actual execution price after liquidity and timing effects.
1.definition
Slippage is the gap between the price a trader expects and the price actually received. It occurs when the market moves before execution or when the order is large relative to available liquidity.
2.dex-context
On automated market makers, slippage grows as a trade consumes more of the pool’s reserves. Traders often set a slippage tolerance, but a wide tolerance can expose them to worse execution or front-running.
Related terms
Market Order
→An instruction to trade immediately against available orders, prioritizing execution over a guaranteed price.
trading · exchange
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
finance · trading
Order Book
→A real-time list of buy and sell orders organized by price level on an exchange.
trading
Bid-Ask Spread
→The difference between the highest bid and lowest ask price for an asset.
trading