If you were to uncheck the 'Market Order' box and buy 10 at 110USD, the order can be partially filled by 1 at 110USD and there are 9 more for sale at 113USD, the matching system would partially fill your order and then wait, right?

Does "slippage" only occur because of market orders?

  • 3
    What's "slippage"? – o0'. May 13 '13 at 7:57
  • I think it refers to when you enter an order at one price, but it will end up partially filled by orders at other prices – Brandon Lockaby May 14 '13 at 2:05
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    Better prices or worse prices? If you get better prices, then you are posting a limit order at a value higher then lowest ask, if you get worse prices then you are posting a market order without really realising what you are doing. – o0'. May 14 '13 at 7:38
  • Does MtGox support so-called limit orders? – Pacerier Aug 15 '13 at 3:45
  • @Lohoris: Prices which are worse than the current lowest ask / highest bid. – Meni Rosenfeld Aug 22 '13 at 16:42

No, slippage also occurs because the price can move adversely between your decision to sell and your order's execution on the market. Typically in financial markets the other participants can see a large order and move their limit orders accordingly.

What you're talking about is called "sweeping". This is simply the fact that there are not enough orders at the best price to match a sufficiently large order. If you have a market order you will then end up filling the next price, which will be worse.

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Slippage is typically measured against the initial lowest ask / highest bid. If you place a limit order to buy at $110, but as it happens the lowest ask was $100 and due to slippage the average execution price was $105, you suffered 5% slippage even though the execution price was better than your limit.

Of course, in this case your order effectively behaves like a market order. When placing a limit order you will never pay more than your limit.

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