Slippage
The difference between the price you asked for and the price you actually got, usually during fast markets.
The difference between the price you asked for and the price you actually got, usually during fast markets.
Quotes are invitations, not promises. In a thin or fast-moving market the level you clicked may have vanished before the order reached the liquidity pool, so the fill arrives a pip or three away from expectation - negative slippage when it costs you, positive when it saves you. News releases, roll-overs and the Sydney-Tokyo handover are the usual hot zones, and market orders are exposed to slippage while limit orders at worst fill at their price or not at all.
Execution quality separates brokers more reliably than advertised spreads do. Some publish average slippage statistics or guarantee no negative slippage on certain order types; others widen spreads first so the requote looks tidy. When you compare brokers, ask how orders fill during high-impact news - the answer, not the commission table, tells you where the cost hides.
Worked example
A market buy is placed with the ask at 1.2740 during an inflation print. The fill arrives at 1.2743 - three pips of negative slippage, about $30 on a standard lot, on top of whatever spread was quoted a heartbeat earlier.
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