How Do ‘Limit Orders’ Mitigate Slippage Risk Compared to ‘Market Orders’?

A market order is executed immediately at the best available price, making it highly susceptible to slippage if the order book lacks depth. A limit order, however, specifies the maximum or minimum acceptable execution price.

If the market cannot meet the limit price, the order is not filled, completely eliminating negative slippage risk beyond the specified limit.