What Are Slippage, Market Gaps and Partial Fills? Market prices do not always move smoothly.

Market prices do not always move smoothly.

Understanding slippage, gaps and partial fills helps explain some of the differences traders may see between expected and actual execution.

What is slippage?

Slippage is the difference between the price expected by a trader and the price at which an order is actually executed.

Suppose you submit a market buy order when an instrument is showing:

100.00

The final execution price is:

100.05

The five-cent difference is slippage.

Slippage can be either:

• Favourable

• Unfavourable

depending on how prices move.

What causes slippage?

Slippage can become more noticeable during:

• Rapid market movements

• Economic announcements

• Low-liquidity periods

• Large orders

• Market openings

• Unexpected news

What is a market gap?

A market gap occurs when the price moves from one level to another without trading continuously through every intermediate price.

For example:

Friday close:

100

Next available market price:

95

The market has effectively gapped lower.

Gaps can occur:

• Between trading sessions

• After weekends

• Following major news

• Around unexpected events

Why do gaps matter?

If a stop-loss trigger sits inside a gap, there may be no available price exactly at that level.

Execution may therefore occur at the next available price.

What is a partial fill?

A partial fill occurs when only part of an order can initially be executed at the available price or liquidity.

Suppose a trader wants to buy:

1,000 units

but only:

600 units

are available at the best current price.

The first 600 may execute at that level, while the remaining amount may need to execute at another available price or remain unfilled, depending on the order rules.

Order size matters

Large orders are more likely to interact with multiple available price levels.

This is particularly important in markets where available liquidity is limited.

Lesson summary

• Slippage is the difference between expected and actual execution prices.

• Slippage can be favourable or unfavourable.

• Market gaps occur when prices jump between available levels.

• Gaps can affect stop-order execution.

• Partial fills occur when insufficient liquidity is available for the full order.