Crypto slippage explained
Slippage is the distance between the price expected when an order is sent and its average execution price. It is an execution result, not a listed fee.
Written and reviewed byCryptoTrades.to View author →How is slippage calculated?
For a buy:
Slippage % = (average fill − expected price) ÷ expected price × 100
If BTC is expected at $80,000 and the average fill is $80,120, adverse slippage is 0.15%. On a $10,000 order that is about $15 beyond the expected value, before commission.
For a sell, the direction reverses: receiving less than expected is adverse.
Why does one order receive several prices?
An order book contains limited quantity at each level. A market buy may take 0.02 BTC at $80,000, 0.05 at $80,040 and the remainder at $80,120. The receipt reports a volume-weighted average.
| Cause | Why it moves the fill |
|---|---|
| Large order | Consumes several levels |
| Thin market | Little size exists near best price |
| Fast volatility | Quotes change during transmission |
| Slow routing | Decision price becomes stale |
| Wide spread | Urgent order starts farther from midpoint |
Spread versus slippage
Spread exists before the trade: best ask minus best bid. Slippage is measured after it. A market buy normally crosses half the midpoint spread immediately and may then slip through additional asks. Treat both as execution cost alongside the fee.
Our live coin pages show cross-venue disagreement, which is different again: it compares eligible venue prices rather than two sides of one order book.
What does slippage tolerance mean?
On swap and some exchange interfaces, tolerance is the maximum adverse movement accepted before the transaction fails. Setting 1% does not mean the trade will cost 1%, nor does it create a 1% fee. It permits execution up to that boundary.
A very tight value can cause failures during volatility. A loose value permits poor execution and can increase exposure to adverse ordering on decentralized venues.
Tolerance is a guardrail, not a prediction.
How can slippage be reduced?
Trade liquid pairs, reduce order size, split carefully, avoid disorderly periods and use a limit order when price matters more than immediate execution. A limit caps the price but creates non-fill and partial-fill risk.
For recurring orders, compare the decision-time quote with each fill and record basis points. Average results over many trades. The venue with the lowest listed fee is not cheapest if it repeatedly loses more to execution.
How should slippage enter position sizing?
If a stop implies a $50 planned loss, allow for the possibility that the exit fills beyond it. A 0.20% slippage buffer on $5,000 notional is another $10. Either reduce the position or accept a $60 stress loss. This is especially important in leveraged and low-volume markets.
Questions people actually ask
01What is the 1% rule in crypto?
It commonly means limiting planned loss on one trade to 1% of account equity. Slippage can make the realised loss exceed that plan, so position sizing needs an execution buffer.
02Is high slippage good?
Adverse slippage is a cost and usually indicates volatility, low liquidity or an order too large for available depth. Positive slippage can occur, but should not be assumed.
03How much should my slippage be?
There is no universal acceptable percentage. It should be small relative to the strategy's expected edge and measured for the pair, venue, order size and market condition.
04Is slippage the same as spread?
No. Spread is the gap between the best bid and ask before execution. Slippage is the difference between the expected reference and the completed average fill.