Slippage, as used in technical terminology, is the discrepancy between the anticipated price at which a transaction is placed and the actual price at which the deal happens. To put it another way, it happens when the order you placed on the exchange is filled at a price that is different from the price you requested.

Every type of market, including stocks, bonds, currencies, and futures, has slippage. For instance: a trader submitted a request to the exchange to buy 10 shares of Tata Steel for Rs. 104 each. The transaction was completed at Rs. 102 per share thanks to the idea of slippage.

Slippage can also work in a trader’s favour if the trader gets to buy the asset/share for less, as was the case in the scenario mentioned above. Slippage can, however, occasionally act against the trader and may have negative effects.