Definition — Slippage is the difference between the price you expected when you placed an order and the price it actually executed at. It usually shows up with market orders, especially when prices move fast or a stock trades thinly.
Why does slippage happen?
The price you see on screen is a snapshot. Between the moment you tap and the moment your order reaches the market, the best available price can change. Your order fills against whatever buyers and sellers are there then — not the quote you saw a second ago.
Three things drive it:
Speed of price movement — in fast markets, the quote moves before you're filled.
Liquidity — thinly traded stocks have fewer orders to match against, so larger orders eat into worse prices.
Spread — a wide bid-ask spread means a bigger jump between buying and selling prices.
Is slippage always bad?
No. Slippage can go either way:
Negative slippage — you pay more (or sell for less) than expected. This is what people usually mean.
Positive slippage — the price moves in your favor between order and fill, so you do slightly better than expected.
Over many trades in liquid stocks, slippage is usually small and roughly balances out. It matters most in volatile or illiquid names.
How to reduce slippage
You can't eliminate it, but you can manage it:
Use limit orders when price control matters — you'll only fill at your price or better, accepting that it may not fill.
Trade liquid stocks and ETFs with tight spreads, where slippage is naturally small.
Avoid the most volatile moments — the first minutes after the open, around major news, or right before the close.
On StableStock, you can choose a limit order whenever you want to cap slippage and control your exact fill price.
Takeaway: Slippage is the gap between expected and actual fill price. It comes from price movement, low liquidity, and wide spreads. It can help or hurt, but you can keep it small by using limit orders and trading liquid names.
Next steps
Market orders vs limit orders — The order type you choose drives how much slippage you see.
What is the bid-ask spread? — A wide spread is one of the biggest sources of slippage.
Stop-loss orders explained — Why a stop-market can fill below your stop.
