Slippage in the trading of stocks often occurs when there is a change in spread. <\/span><\/p>\n In this situation, the trader’s market order may get executed at a less favorable price than originally expected. In the case of a long trade, the ask may have some increase.<\/span><\/p>\n Slippage represents situation when the price at which trader’s order is executed does not match the price at which it was made.<\/span><\/p>\n If slippage happens on a stop, it may not be triggered at the level at which it was set.<\/span><\/p>\n Slippage happens when the market moves suddenly against trader’s order. And in the time it takes for the broker to process the order.<\/span><\/p>\n In such circumstances, the original price is no longer available. <\/span><\/p>\n Slippage is more likely to occur in periods of high volatility, but honestly, it can occur at any time.<\/span><\/p>\n For instance, the trader has an open position on a market that closes over the weekend. When the market reopens on Sunday evening, it is trading at a much lower price than it had been on Friday.<\/span><\/p>\n If the trader has a stop between these two prices, it will not be filled while the market is shut. Hence, such an order would be filled at a worse price than expected.<\/span><\/p>\n Orders prone to slippage:<\/strong><\/p>\n How to avoid this?<\/strong> <\/span><\/p>\n The best way is to plan out trades well in advance. Or to make use of risk management tools like guaranteed stops that eliminate the risk of slippage.<\/span><\/p>\n A guaranteed stop will always complete trades at the price at which trader has set them. If stop loss is triggered, there will be a small premium to pay in addition to normal transaction fees.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" DEFINITION of Slippage Slippage in the trading of stocks often occurs when there is a change in spread. WHAT IT IS IN ESSENCE In this situation, the trader’s market order may get executed at a less favorable price than originally expected. In the case of a long trade, the ask may have some increase. Slippage […]<\/p>\n","protected":false},"author":4,"featured_media":7218,"parent":3046,"menu_order":1,"comment_status":"closed","ping_status":"closed","template":"","meta":{"content-type":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"class_list":["post-3564","page","type-page","status-publish","has-post-thumbnail","hentry"],"yoast_head":"\nWHAT IT IS IN ESSENCE<\/b><\/h4>\n
HOW TO USE<\/b><\/h4>\n
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