What is “Slippage” and why does it occur?

What is “Slippage” and why does it occur?

Slippage occurs when there is a gap in the market prices or when the available liquidity at a given price has been exhausted. Slippage usually happens in fast-moving markets where prices can jump without trading at the intermediate levels. Additionally, each price level has a certain amount of available liquidity. For example, if the price is at 50 and 1 million is available at 50, a 3 million order will experience slippage because 3 million exceeds the 1 million available at 50.