Glossary
What is slippage in crypto trading?
Also called: price slippage, execution slippage, slip
Updated Ninja Terminal team
Definition
Slippage is the difference between the expected price of an order and the average price at which it fills. It happens when the market moves before execution or when an order is larger than the liquidity at the best price. Market orders and stop-market orders are most exposed. Limit orders avoid slippage but may not fill.
Slippage is a cost of trading. It can be small on liquid markets and large on thin markets or in fast moves.
What causes it?
- Order size: a large order walks through the order book and fills at worse prices level by level.
- Latency and volatility: price changes between your decision and the fill.
- Trigger orders: a stop-market order fires into a moving market.
Example: you expect to buy 3 BTC at the best ask of 60,000. The book has 1 BTC at 60,000, 1 BTC at 60,010, and 1 BTC at 60,030. The average fill is 60,013.33, so slippage is about 13.33 USD per BTC, or about 0.02%.
How can you limit it?
- Use a limit order with a price you accept.
- Split a large order into smaller parts.
- Trade liquid markets and check the bid-ask spread first.
- Use a stop-limit order when a price limit matters more than a fill.
Does slippage always hurt?
No. Slippage can also be positive, when the fill is better than expected. On average it is a cost, so budget for it with fees. See maker and taker fees.
Where does it appear in Ninja Terminal?
The Quick Entry route preview shows an estimated slippage before you place an order. The preview is an estimate. The actual fill depends on the market at the time of execution.
Frequently asked questions
What is a normal amount of slippage?
It depends on the market and the order size. Liquid markets can show a tiny amount, and thin markets can show a lot. Check the order book depth before you trade.
Can a limit order have slippage?
A resting limit order fills at its price or better, so negative slippage does not apply. A marketable limit can fill at better prices than your limit.