Slippage
The difference between the expected price of a trade and the price at which the trade actually executes. Slippage often occurs during periods of higher volatility, when market orders are used and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of the trade. Slippage is a term often used in both forex and stock trading, and although the definition is the same for both, slippage occurs in different situations for each of these types of trading. In forex, slippage occurs when a limit order or stop loss occurs at a worse rate than originally set in the order. Slippage often occurs when volatility, perhaps due to news events, makes an order at a specific price impossible to execute. In this situation, most forex dealers will execute the trade at the next best price. Traders can help to protect themselves from slippage by avoiding market orders when not necessary.
Slippage may refer to:
- Degree of slipping or loosening as result of slipperiness
- Slippage (finance), the difference between estimated transaction costs and the amount actually paid
- Project slippage, in project planning, the act of missing a deadline
- Replication slippage, nucleotide duplications created by DNA polymerase during DNA replication
