Understanding Slippage: Why Your Fill Is Not the Price You Saw

You hit market buy and the fill comes in a little higher than the price you just saw — that difference is slippage. It is not in the fee line, but it is a real cost.

Where it comes from A market order walks the book from the best price upward, eating one level at a time until your size is filled. If a level lacks enough volume, it takes the next, worse one. The thinner the book and the bigger your order, the more levels you cross, and the further your average fill drifts from the price you saw.

Two kinds One is liquidity slippage (above). The other is latency slippage: time passes between your click and the fill, and the price itself moves in that window. In violent markets the two stack and slippage gets ugly.

How to estimate it Glance at depth before ordering (see how to read an order book). If your size approaches the volume resting at the best level, be wary. Small coins, late hours, and sharp moves are the danger zones.

How to keep it small Use limit orders instead of market to lock your worst fill; break large orders into smaller fills; set a slippage tolerance (most exchanges and DEXs offer it) so the trade aborts past your limit.

It runs with fees Slippage, fees, and funding rates are all "trading cost." Saving on fees while bleeding on slippage cancels out. Treat cost as one number — see minimize your fees.

Editor's take Beginners watch only fees; pros count slippage too. True total cost equals fees plus slippage plus (for futures) funding. Optimize all three and only then have you actually controlled cost.