When you place a trade, the price can shift between the moment you submit it and the moment it executes. That difference is slippage. It happens for two main reasons: the market moved in the brief interval, or your order was large relative to the available liquidity, so it ate through several price levels to fill. In fast or thinly-traded markets, both effects can be significant.
A concrete example makes it clear. Suppose you try to buy a small token quoted at one pound, but the order book or liquidity pool is thin. Your buy pushes the price up as it fills, so your average cost ends up at, say, one pound and five pence. That five-pence gap is slippage, and it grows the larger your order is compared with the market's depth.
This is why trading interfaces let you set a slippage tolerance, a maximum deviation you will accept before the trade is cancelled. Setting it too tight can cause trades to fail in volatile moments; setting it too loose can expose you to a worse fill, and even to manipulation on some on-chain trades. Understanding slippage helps you trade thin markets with fewer nasty surprises. On decentralised exchanges an overly generous slippage setting can even be exploited by bots that sandwich your trade, so tighter settings are usually wiser there.
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Key takeaways
- Slippage is the gap between your expected trade price and the price you actually receive.
- It is driven by the market moving during execution or by an order that is large relative to available liquidity.
- Slippage tolerance settings let you cap how much deviation you will accept before a trade is cancelled.
Slippage — часто задаваемые вопросы
What causes slippage?
Two things mainly: the price moving in the moment between placing and filling a trade, and an order large enough to consume several price levels in a thin market. Low liquidity makes both effects worse.
How do I reduce slippage?
Trading more liquid markets, using smaller orders relative to available depth, and setting a sensible slippage tolerance all help. On volatile or thin markets some slippage is often unavoidable.
Related terms
LiquidityOrder BookLiquidity PoolAutomated Market Maker (AMM)Волатильность Все термины →New to crypto, or filling in the gaps? Work through the essentials in Learn, browse every term A–Z, or see live prices for the coins these concepts power.