Slippage definition

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Slippage has a particular significance in relation to IG's platform. Here, we define slippage in general investing and explain what it means to you when trading with IG.

When the price at which an order is executed does not match the price at which it was made, it is referred to as slippage.

Slippage occurs when the market moves suddenly against your order, and in the time it takes for your broker to process your order the original price stipulated is no longer available. Because of this, slippage is more likely to occur in periods of high volatility, though they can occur at any time.

Orders prone to slippage

  • Market orders, where the broker is authorised to make a trade at the best available next price. This can be exaggerated for large market orders, when finding liquidity can be hard.
  • Stops and limits, when a sudden price movement makes it impossible to carry out a trade at the price specified in the order.

The best way of avoiding slippage is to plan out trades well in advance, or to make use of risk-management tools like guaranteed stops to eliminate the risk of slippage.

Slippage factor definition:

It is a factor which IG uses to calculate margin for positions with a non-guaranteed stop level.
Because a non-guaranteed stop is subject to slippage, the margin requirement is sometimes greater than for a position opened with a guaranteed stop. This depends on the relevant market and / or your stop distance. 
The margin requirement for a position with a non-guaranteed stop comprises two parts:
  1. Risk margin: exposure per point movement x stop distance
  2. Slippage margin: slippage factor x normal initial margin
Therefore, the margin calculation would be as follows: (Number of contracts X amount per point X price X margin requirement X slippage factor) + ( Stop distance X number of contracts X amount per point)
The normal initial margin is the margin that would be required on the contract if no stop was placed at all. The slippage factor is a percentage that is applied individually to various markets and usually ranges from 30% to 50%.
Margin rates and slippage factors can vary, dependent on the regulatory rules governing the country in which your account is based. Please look in the “Get info” page from the platform understand the particular product you are trading for the slippage factor.
Please note that the slippage factor is not the a measure of the maximum loss which may be unlimited in the case of a non-guaranteed stop but in the case of a guaranteed stop, it is limited to the guaranteed stop level.
Visit our education page on leverage for more information about slippage factor and the calculation.

With IG

Slippage is a possibility with CFDs trading. Our CFD accounts offer the ability to add guaranteed stops to a position, in order remove the risk of slippage from trades entirely. 

To activate a guaranteed stop, tick the ‘guaranteed stop’ box on the deal ticket. The deposit amount will change, and it includes the premium we'll charge if your stop is triggered.*

Visit our education section

Find out more about stops and limits on our platform.

*There is a small, one-off fee when you choose to attach a guaranteed stop.

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