Distinguish between ‘Positive Slippage’ and ‘Negative Slippage’.
Negative slippage occurs when a trade is executed at a worse price than the expected price, which is the common scenario in market-order executions in volatile or illiquid markets. Positive slippage occurs when a trade is executed at a better price than the expected price, which can happen if the market moves favorably during the order routing or execution process.
Glossar
Order Routing
Procedure ⎊ Order Routing is the process by which a trading instruction is directed from the originating system to the most appropriate execution venue, whether a centralized exchange, a decentralized AMM, or an off-chain matching system for derivatives.
Positive Slippage
Mechanism ⎊ Positive slippage, within cryptocurrency derivatives and options trading, denotes the fulfillment of an order at a more favorable price than initially anticipated, specifically benefiting the buyer.
Negative Slippage
Mechanism ⎊ Negative slippage, within cryptocurrency derivatives and options trading, represents the discrepancy between the expected price of a trade and the price at which the trade is ultimately executed.