Slippage

Slippage is the difference between the price you expected for a trade and the price you actually got. It happens because prices move between decision and execution, and because large orders consume multiple levels of the order book, filling at progressively worse prices.

For example, if you market-buy $50,000 of a small-cap altcoin quoted at $2.00, your order might exhaust the sellers at $2.00 and keep filling at $2.01, $2.03, and $2.06, for an average price of $2.03 — about 1.5% of slippage. The same order on a deep BTC market might slip only a fraction of a basis point.

Slippage is largest in illiquid markets, during volatile news events, and for big orders relative to available depth. Traders manage it by using limit orders, splitting large orders into smaller pieces, and trading liquid pairs. On decentralized exchanges you typically set a slippage tolerance; setting it too high invites sandwich attacks, while too low causes failed transactions. A common misconception is that slippage is always a loss — prices can also move in your favor between order and fill — but for market orders that cross a spread, expecting some cost is the realistic default.