Orders & execution
What is slippage and how do I calculate its impact on my net trading returns?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Slippage is the difference between a trade's expected price and its actual execution price, calculated by multiplying the price difference by the number of shares traded to find net impact.
How it works
Slippage tends to increase with order size, volatility, and lower liquidity. Tracking it over time helps traders understand real transaction costs beyond quoted commissions or spreads.
An example
A trader expects to buy at $20.00 but the order fills at $20.08 across 500 shares, resulting in $40 of slippage cost on that trade.
Risk & limitations
Ignoring cumulative slippage across many trades can significantly understate the true cost of an active trading strategy over time.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.