How Does ‘Slippage’ Affect a Margin Call Triggered by an Oracle?
Slippage is the difference between the expected price of a trade and the price at which the trade is actually executed. When an oracle triggers a margin call leading to liquidation, the liquidation order must be executed on the market.
If the market is illiquid or the order is large, high slippage can occur, meaning the position is closed at a worse price than anticipated. This can result in a larger loss or even a deficit in the account after liquidation.
