Slippage definition

What is slippage?

Slippage is the term for when the price at which your order is executed does not match the price at which it was made. It can affect lots of different types of orders – if slippage occurs on a stop, for instance, then it may not be triggered at the level at which it was set.

How does slippage occur?

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 it can occur at any time.

Slippage example

Say you have 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. 

If you had a stop at some point between these two prices, it would not have been filled while the market was shut, and your order would be filled at a worse price than expected.


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.

How do I prevent slippage?

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 that eliminate the risk of slippage.

Unlike standard stop losses, a guaranteed stop will always complete trades at the price at which you have set them – if your stop loss is triggered, there will be a small premium to pay in addition to normal transaction fees.

Slippage with IG

Slippage is a possibility with spread bets, CFDs and shares trading. Our CFDs and spread betting accounts offer the ability to add guaranteed stops to a position, in order remove the risk of slippage from trades entirely. As share dealing with IG involves taking ownership of the shares themselves, guaranteed stops are not available.

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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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.