Does Slippage Only Occur on Market Orders, or Can It Affect Limit Orders as Well?
Slippage is primarily associated with market orders, as they demand immediate execution at the prevailing price, which can move. However, a limit order can experience a form of "opportunity cost slippage" if the market price moves away from the limit price before it can be filled, meaning the trader missed a chance for a better execution.
Real price slippage on a limit order is rare, typically only in extreme volatility or system errors.
Glossar
Limit Order
Instrument ⎊ A limit order is an instruction to trade an asset at a specified price or better, providing the trader with precise control over the entry or exit cost, unlike a market order.
Immediate Execution
Execution ⎊ In the realm of cryptocurrency derivatives, options trading, and financial derivatives generally, immediate execution signifies a trade order fulfilled substantially contemporaneously with its submission, contrasting with delayed or conditional order routing.
Slippage
Variance ⎊ Slippage, within cryptocurrency, options, and derivatives, represents the difference between the expected price of a trade and the price at which the trade is actually executed, stemming from market dynamics and order book depth.
Limit Orders
Execution ⎊ Limit orders, within cryptocurrency, options, and derivatives markets, represent instructions to buy or sell an asset at a specified price, or better, contingent upon market conditions.