Slippage is the difference between the expected fill price and the actual fill price.

A high probability of slippage may occur in highly volatile markets such as during news or economic releases.

If the execution price is better than the price requested by the client, this is referred to as ‘positive slippage’. In contrast, if the execution price is worse than the price requested by the client this is referred to as ‘negative slippage'.

Example 1
Assume that you place a Market Order to sell Crude Oil when the last traded price is $50.80 during Non-Farm Payrolls announcement. The price of Crude Oil rises significantly reaching the level of $51.50. The $51.50 is then the price that becomes available again. In this case, you will receive the price of $51.50 instead of the price $50.80. This is a typical example of a positive slippage since you sell at a higher price. You will not receive a reject in the market execution unless a Spread Limitation occurs.

Example 2
Assume that you place a Market Order to sell Crude Oil when the last traded price is $50.80 during Non-Farm Payrolls announcement. The price of Crude Oil falls significantly reaching the level of $49.50. The $49.50 is then the price that becomes available again. In this case, you will receive the price of $49.50 instead of the price $50.80. This is a typical example of a negative slippage since you sell at a lower price. You will not receive a reject in the market execution unless a Spread Limitation occurs.

Please be advised that ‘slippage’ is a normal market practise and a regular feature of CFD trading. Stop / Limit orders may also be affected by this.