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How Does a Market Maker Estimate the Future Slippage Cost for a Hedge?

Market makers estimate future slippage cost by analyzing historical market data, specifically the depth and elasticity of the order book for the underlying asset. They use models that factor in the expected size of the hedge (derived from the option's Delta and the RFQ size) and the asset's typical market impact profile to project the likely execution price difference.

How Does a Change in Tick Size Affect the Depth and Volume at the Top of the Book?
What Is the Difference between Historical and Implied Volatility?
How Is Delta Used as a Probability Estimate for an Option Expiring ITM?
What Is the Role of Historical Volatility in Options Pricing Models?