Slippage
Slippage is the difference between the expected price of a trade and the actual execution price. It occurs when there's not enough liquidity at your target price.
Understanding the Concept
Slippage is the hidden cost of trading. You see BTC at $50,000, you buy, and your average fill is $50,100. That extra $100 per coin is slippage.
Slippage happens because: the orderbook is thin, the market moved while your order executed, or your order is large relative to available liquidity. Market orders have more slippage than limit orders.
For large orders, slippage can be substantial. A $1M market buy might cost 0.5-2% in slippage on illiquid pairs. That's $5,000-$20,000 in hidden costs. Always estimate slippage before executing.
Real-World Example
You market buy 10 BTC. Order book shows best ask at $50,000 but only 2 BTC available. Your order sweeps through: 2 BTC at $50,000, 3 BTC at $50,050, 5 BTC at $50,150. Average price: $50,090. That's 0.18% slippage.
How PRISM Handles This
PRISM's orderbook endpoints let you calculate expected slippage before trading. See exact fill levels for any order size. Our aggregated view across exchanges helps you find the best execution path to minimize slippage.
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