Slippage

In trading, slippage refers to price slippage i.e. when the price at which trades are executed diverges, particularly in volatile or thin markets, from the exact price a client intends. Slippage does not always move against the client; it can move in the client’s favour. Depending on the broker’s policy, requested orders may be executed regardless of adverse slippage. Others will not process orders if slippage falls above or below a specified level away from best execution. Brokers recommend that clients use stops or limits in their trading strategies to avoid slippage.