Course: Trading Mechanics·Lesson 2 of 2·6 min read·Last reviewed 9 May 2026
Understanding slippage
The gap between the price you wanted and the price you got — and when it matters most.
James Okonkwo
Ex-market maker · 11 yrs FX options · CMT
By the end of this lesson you'll be able to:
- Define slippage in your own words
- List two market conditions that widen slippage
- Estimate slippage before sizing a trade
Slippage is a cost
Slippage is the difference between expected fill price and actual fill price. It is not a broker conspiracy — it is physics: thin liquidity and fast markets move between your click and your fill.
Slippage
The difference between the price you expected and the price you actually received on a fill.
Quiz — Test your understanding
1. Slippage most often increases when:
2. News events typically cause slippage because:
3. The best way to reduce slippage risk is often: