{"id":12249,"date":"2026-05-22T13:39:31","date_gmt":"2026-05-22T13:39:31","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/slippage\/"},"modified":"2026-05-22T13:39:31","modified_gmt":"2026-05-22T13:39:31","slug":"slippage","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/slippage\/","title":{"rendered":"Slippage"},"content":{"rendered":"<p><a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/slippage\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Slippage<\/a> is the gap between the price you expected to trade at and the price you actually got. It is the silent <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a> of fast markets &mdash; and a major reason why backtested strategies look better on paper than in real life. Every active trader needs to understand slippage to size positions correctly and pick the right order types.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>Slippage is the difference between expected and executed price, in either direction.<\/li>\n<li>It is highest in volatile markets, illiquid <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stocks\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>stocks<\/a>, and during news-driven minutes.<\/li>\n<li><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/market-order\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Market order<\/a>s cause more slippage than <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/limit-order\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">limit order<\/a>s, but limit orders may not fill.<\/li>\n<li>Auto square-off orders, large block trades, and stop-loss triggers are common slippage culprits.<\/li>\n<li>You can reduce slippage with limit orders, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/iceberg-order\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">iceberg order<\/a>s, and <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/trading\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>trading<\/a> during high-<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/liquidity\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">liquidity<\/a> windows.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"a-practical-example-of-slippage\">A practical example of slippage<\/h2>\n<p>Suppose <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nifty\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Nifty<\/a> is trading at 22,100 and you want to buy 10 lots of Nifty futures with a market order. The best ask shows 22,100.15 but only for 5 lots; the next 5 lots get filled at 22,100.45. Your average price is 22,100.30 &mdash; that 0.15-point gap from your expected 22,100.15 is slippage. Multiply by 25 (<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/lot-size\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>lot size<\/a>) and 10 lots and that is &#8377;375 of cost you did not anticipate.<\/p>\n<h2 id=\"what-causes-slippage\">What causes slippage<\/h2>\n<ul>\n<li><strong>Low liquidity:<\/strong> Stocks with thin order books cannot absorb large orders without moving the price.<\/li>\n<li><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/volatility\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Volatility<\/a> spikes:<\/strong> News, results, or macro data can shift quotes faster than your order reaches the exchange.<\/li>\n<li><strong>Large order size:<\/strong> When you eat through multiple price levels of the order book.<\/li>\n<li><strong>Market open and close:<\/strong> Pre-open auctions and the closing call create temporary imbalances.<\/li>\n<\/ul>\n<h2 id=\"why-slippage-hurts-strategies\">Why slippage hurts strategies<\/h2>\n<p>Backtests usually assume execution at a single reference price &#x2014; the close, the high, or a chosen quote. Real markets do not work that way. A scalping system showing &#x20B9;2 average profit per trade will quickly become unprofitable if slippage on entry and exit is &#x20B9;1.50 per trade.<\/p>\n<h2 id=\"how-to-reduce-slippage\">How to reduce slippage<\/h2>\n<ol>\n<li><strong>Use limit orders<\/strong> in volatile or illiquid markets. You may miss some trades, but you control the worst price.<\/li>\n<li><strong>Avoid the first and last five minutes<\/strong> of a session unless you specifically need to trade those windows.<\/li>\n<li><strong>Split large orders<\/strong> with an iceberg or manual ladder of smaller orders.<\/li>\n<li><strong>Check depth<\/strong> in the order book before market orders &#x2014; do not blindly press buy.<\/li>\n<li><strong>Use stop limit instead of stop market<\/strong> where possible to cap downside from slippage.<\/li>\n<\/ol>\n<h2 id=\"positive-vs-negative-slippage\">Positive vs negative slippage<\/h2>\n<p>Slippage is not always bad. If you place a market buy and the price drops microseconds later, you may get filled below your expected price &#x2014; positive slippage. In aggregate, however, traders experience more negative than positive slippage because aggressive orders consume liquidity at progressively worse prices.<\/p>\n<h2 id=\"slippage-in-different-segments\">Slippage in different segments<\/h2>\n<table>\n<tr>\n<th>Segment<\/th>\n<th>Typical slippage<\/th>\n<\/tr>\n<tr>\n<td>Liquid Nifty\/Bank Nifty futures<\/td>\n<td>0.05&#x2013;0.10 points<\/td>\n<\/tr>\n<tr>\n<td>Mid-cap cash <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/equity\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>equity<\/a><\/td>\n<td>0.10&#x2013;0.50% in normal markets<\/td>\n<\/tr>\n<tr>\n<td>Far OTM options (illiquid)<\/td>\n<td>5&ndash;15% of <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/premium\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>premium<\/a><\/td>\n<\/tr>\n<tr>\n<td>News-driven small-caps<\/td>\n<td>1% or more per trade<\/td>\n<\/tr>\n<\/table>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"is-slippage-the-same-as-brokerage\">Is slippage the same as <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/broker\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>broker<\/a>age?<\/h3>\n<p>No. Brokerage is a direct fee charged by your broker. Slippage is an implicit cost arising from market dynamics &mdash; you do not see it on the contract note but it eats into your P&amp;L.<\/p>\n<h3 id=\"can-stop-loss-orders-suffer-slippage\">Can stop-loss orders suffer slippage?<\/h3>\n<p>Yes. A stop-loss market order will fire after the trigger and may execute several ticks below the trigger price in fast markets.<\/p>\n<h3 id=\"does-slippage-exist-in-mutual-funds\">Does slippage exist in <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/mutual-fund\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">mutual fund<\/a>s?<\/h3>\n<p>Mutual funds settle at end-of-day <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nav\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>NAV<\/a>, so individual trade slippage is invisible to investors, but it shows up indirectly in fund performance.<\/p>\n<h3 id=\"how-is-slippage-measured\">How is slippage measured?<\/h3>\n<p>Compare the mid-price (or last traded price) at order placement with the actual average execution price. The difference, in points or basis points, is the slippage.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Slippage is the gap between the price you expected to trade at and the price you actually got. It is the silent tax of fast markets &#x2014; and a major reason why backtested strategies look better on paper than in real life. Every active trader needs to understand slippage to size positions correctly and pick [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12249","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Ashutosh","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"Slippage is the gap between the price you expected to trade at and the price you actually got. It is the silent tax of fast markets &#x2014; and a major reason why backtested strategies look better on paper than in real life. Every active trader needs to understand slippage to size positions correctly and pick&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12249\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}