Slippage mentions the gap between an expected price of a trade and the current price at which it is
executed. This effect occurs in most cases when a significant order is filled, but there is an insufficient
volume at the chosen price in a market to maintain the current bid-ask spread.
This can be encountered at any time and in any market, but it is particularly frequent during periods
of high volatility when market orders are placed. The other reason slippage occurs in
cryptocurrencies is a lack of liquidity.
For example, it is quite possible that a stop loss will not be honored. The execution of the order may
be downstream, which will result in a larger loss than what was estimated when the stop loss was
set. Indeed, as the cryptocurrency market is far more volatile than other ones, the impact of slippage
is far more pronounced. Between the execution request of an order and its real completion on the
platform, a few seconds are enough for the price to rise or fall by a couple of percent. When
combined with a platform with relatively low liquidity and high latency, the consequences can be
catastrophic for unprepared investors.
It is good to know that there is no price slippage, no swap fees, and no gas fees on Kromatika
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