What is slippage? Why market orders can fill at a worse price
Short answer
Slippage is the difference between the price you saw when you placed an order and the average price it actually filled at. Market orders get it most: if prices move fast or there aren't many orders on the book, your order works its way up to worse prices. A limit order avoids it.
- Slippage isn't a fee. The exchange doesn't charge it separately, and the rebate doesn't cover it.
- On busy pairs, small orders usually see very little slippage.
In one line
The gap between the price you saw and the price you got.
An example
Say a small coin is selling at 1.00 USDT and you place a market order for 1,000 USDT of it. There isn’t enough on sale at 1.00, so the rest fills at 1.01, 1.02 and 1.03. Your average price ends up around 1.02: instead of about 1,000 coins, you get about 980.
Fees and the rebate
Slippage isn’t a fee, so the exchange doesn’t charge it separately and the rebate doesn’t cover it: the rebate is only based on trading fees. Fees are out in the open (standard spot taker fees are 0.1% at Binance and 0.1% at OKX). Slippage hides in the fill price, and on coins that don’t trade much, it can cost more than the fee.
Related
FAQ
How do I reduce slippage?
Use a limit order, so you set the price and never fill at a worse one. Stick to busy pairs, and split large amounts into smaller orders.
Do limit orders have slippage?
They never fill at a worse price than the one you set. The catch: if the price moves away, your order may never fill.
Do I get a rebate on slippage?
No. The rebate is based on the fees you actually pay. Slippage is a difference in price, not a fee.