What is slippage?

Slippage is the difference between the expected price of a trade and the actual execution price, often occurring in volatile or low-liquidity markets. It can be positive (resulting in a better price/fill) or negative (resulting in a worse price/fill). Factors contributing to slippage include market volatility, low liquidity, and the type of order used (market orders are more prone to slippage than limit orders). To minimize slippage, traders can use limit orders, trade during high liquidity periods, and avoid trading during major news events.