Slippage is the gap between the price you expected and the price you actually got. It's a normal cost of trading — and understanding it helps you avoid nasty surprises.
What slippage is
When you place a market order, you're asking to trade now at the best available price. Between clicking and filling, price can move — so you may get filled slightly better or, more often, slightly worse than you saw. That difference is slippage.
When it happens most
- Fast markets — during sharp moves, price changes faster than orders fill.
- Low liquidity — thin order books mean your order eats into worse prices.
- News events — spreads widen and prices gap around major releases.
- Gaps — markets that close (stocks, F&O) can reopen far from the prior price.
Why it matters for stops
Here's the part that catches people out: a stop-loss becomes a market order when triggered. In a fast move or a gap, it can fill well past your stop level. Your "fixed" risk can occasionally be larger than planned. This is one reason to size conservatively and avoid holding through major events or, in crypto, over thin weekend periods.
How to reduce it
- Trade liquid instruments during active hours.
- Use limit orders when you can wait for a price (see order types).
- Avoid entering on the spike of a news release.
- Don't keep dangerously large positions through scheduled volatility.
Slippage is the market reminding you that the price you see and the price you get aren't always the same.
Education only — not financial advice.