Your order may be executed at a different price than expected due to slippage, which occurs when market prices change between the time an order is submitted and the time it is executed. Slippage can result in either a better or worse execution price than expected. Negative slippage occurs when you buy at a higher price or sell at a lower price than expected. In contrast, positive slippage occurs when you buy at a lower price or sell at a higher price than expected.

Why does slippage happen?

A market order is executed at an available market price when it reaches the execution system. As market prices can change quickly, particularly during periods of high volatility, the execution price may differ from the price displayed when you submitted the order.

What factors can cause slippage?

• High volatility: Prices can move rapidly around economic releases, central bank announcements, and unexpected market events.
• Low liquidity: Fewer available buyers or sellers can result in larger price movements between available quotes.
• Market gaps: When a market reopens after a trading break, the next available price may differ significantly from the previous price.
• Order size: Larger orders may be executed across several available price levels, depending on available liquidity.
• Connection latency: A slow or unstable connection may cause delays, during which market prices can change.

Can slippage affect stop loss and take profit orders?

During periods of high volatility or market gaps, slippage may occur where the execution price may differ from the specified Stop Loss and Take Profit level set, which causes the actual closing price to differ.