Slippage in trading explained: why your fill price can differ from your quote
Published: Oct 07, 2026
Key Takeaways
Slippage refers to the difference between the price expected when an order is submitted and the price at which the order executes.
Quotes represent available market information at a specific moment and may change before an order is filled.
Factors such as liquidity, volatility, bid-ask spreads, order size, and execution timing can affect slippage.
Market orders can be more exposed to slippage because they prioritize execution over a specific price.
Slippage can be positive or negative, depending on whether the final execution price is more or less favourable than expected.
Key Takeaways
Slippage refers to the difference between the price expected when an order is submitted and the price at which the order executes.
Quotes represent available market information at a specific moment and may change before an order is filled.
Factors such as liquidity, volatility, bid-ask spreads, order size, and execution timing can affect slippage.
Market orders can be more exposed to slippage because they prioritize execution over a specific price.
Slippage can be positive or negative, depending on whether the final execution price is more or less favourable than expected.
A quoted price does not always become the final price at which a trade executes. Slippage is the difference between the price expected when a trade is submitted and the price at which the trade is actually executed.
This difference can occur because market prices and available liquidity may change between the time an order is entered and the time it is filled. Factors such as bid-ask spreads, liquidity, volatility, market orders, order size, and execution timing can all influence the final execution price.
Slippage is not necessarily a separate fee charged on a transaction. Instead, it describes an outcome of the execution process when the completed trade occurs at a different price than initially expected.
Understanding slippage can help explain why the displayed quote before submitting an order may differ from the completed trade confirmation.
How slippage works
Slippage occurs during the process between viewing a quote, submitting an order, and receiving a fill.
A market quote reflects available prices and quantities at a particular moment. However, prices and available shares can change quickly as other market participants place, modify, or cancel orders.
When an order is submitted, the available liquidity at that moment determines the potential execution prices. A market order generally seeks immediate execution but does not guarantee a specific price. Depending on market conditions, an order may fill entirely at one price or across multiple price levels.
The final average execution price can therefore differ from the price displayed when the order was entered.
Expected price versus execution price
The expected price refers to the price a trader sees or anticipates before the order is completed. The execution price refers to the actual price received after the order fills.
For example, a hypothetical security shows a quote of $25.00. A market order is submitted, and the order fills at an average price of $25.06.
The slippage calculation would be:
Execution price − expected price = slippage per share
$25.06 − $25.00 = $0.06 per share
For 100 shares:
$0.06 × 100 shares = $6.00
In this example, the difference represents negative slippage because the purchase occurred at a higher price than expected.
Positive and negative slippage
Slippage can occur in either direction. The final execution price can be less favourable or more favourable than the price expected when the order was submitted.
Negative slippage
Negative slippage occurs when an order executes at a less favourable price than expected.
Examples include:
A purchase executing at a higher price than expected.
A sale executing at a lower price than expected.
Negative slippage can reduce the outcome of a transaction compared with the original expected price.
For example, a buyer expecting to purchase shares at $50.00 may receive a fill at $50.05. A seller expecting to sell shares at $50.00 may receive a fill at $49.95.
The difference can result from changing prices, available liquidity, or market conditions during execution.
Positive slippage
Positive slippage occurs when an order executes at a more favourable price than expected.
Examples include:
A purchase executing at a lower price than expected.
A sale executing at a higher price than expected.
In some contexts, positive slippage may be described as price improvement. However, the terms can refer to different concepts depending on the context and measurement method being used.
The occurrence and size of positive slippage can depend on available market prices, order characteristics, and market conditions at the time of execution.
Slippage, whether positive or negative, reflects the difference between an expected price and the completed trade price rather than a guaranteed transaction outcome.
What causes slippage?
Slippage can occur when the price or available liquidity changes between order submission and execution. Several factors can influence the difference between an expected price and the final fill price.
Market volatility
Rapid price movements caused by events such as company announcements, economic releases, or changing market conditions can affect available execution prices.
Limited liquidity
When fewer shares or contracts are available at a specific price level, an order may fill across multiple prices, resulting in a different average execution price.
Wide bid-ask spreads
The bid-ask spread represents the difference between available buying and selling prices. A wider spread can increase the difference between displayed quotes and execution prices. The spread and slippage are related but separate concepts: the spread reflects quoted prices, while slippage compares expected and actual execution prices.
Order size
Larger orders may exceed the available quantity at the most favourable price level and receive partial fills at different prices.
Execution speed and market conditions
Even electronic orders can encounter changing prices during fast-moving financial markets. Execution timing, liquidity, and order flow can affect the final fill price. Faster processing does not guarantee execution at a previously displayed quote.
Trading outside regular market hours
Pre-market and post-market sessions typically have lower liquidity and wider spreads, which increases slippage. A market order entered outside trading hours is queued and sent to the exchange at the next market open, so it fills at the opening price, which may differ substantially from the quote you saw when you entered the order.
Slippage, spreads, commissions, and market impact
Slippage, bid-ask spreads, commissions, and market impact can all affect the overall cost of trading, but they describe different parts of the execution process.
Concept | Description |
Slippage | The difference between the expected price and the actual execution price |
Bid-ask spread | The difference between the current bid and ask prices |
Commissions and fees | Explicit charges associated with a transaction or account, where applicable |
Market impact | Price movement that can occur due to the size or presence of an order |
Slippage
Slippage describes the difference between the anticipated execution price and the completed trade price. It can be positive or negative depending on whether the final price is more or less favourable than expected.
Bid-ask spread
The bid-ask spread represents the gap between available buying and selling prices. A trader entering or exiting a position may encounter this spread as part of the normal process of trading in a market.
The spread does not measure slippage, although both can influence the difference between an expected transaction outcome and the final result.
Commissions and fees
Commissions and other transaction costs represent explicit charges associated with trading activity where applicable. These trading costs are separate from slippage, although both can affect the overall result of a transaction.
Applicable fees can depend on factors such as account type, security, market, and service provider documentation.
Market impact
Market impact refers to price changes associated with the size or presence of an order in the market. Larger orders may interact with available liquidity in ways that affect execution prices.
Market impact and slippage can overlap in certain situations, but they describe different concepts. Slippage focuses on the difference between expected and executed prices, while market impact focuses on how trading activity may influence available prices.
Understanding these distinctions can help separate execution-related price differences from other transaction costs.
Conclusion: why fill prices differ from quotes
Quotes provide current market information, but they do not guarantee a specific execution price. Slippage reflects the interaction between price movement, liquidity, bid-ask spreads, order size, order type, and execution timing.
Market orders can experience slippage because they generally prioritize execution rather than a specified price. The final fill can be affected by the prices and liquidity available when the order reaches the market.
Slippage can occur in either direction. A trade may execute at a less favourable price than expected, or it may receive a more favourable price depending on market conditions.
Reviewing order details, execution records, and market conditions can help explain the factors that contributed to the final execution result. Understanding slippage forms part of evaluating how trading activity interacts with market liquidity and price availability.
