What Is Slippage? Price Impact in Prediction Market Trades
Slippage is the difference between the expected price of a trade and the actual execution price. It occurs when your order is too large relative to available liquidity.
Definition
Slippage is the difference between the price you expect to pay for a trade and the price you actually receive. It typically occurs when you place a market order that consumes multiple price levels in the order book.
Example
The order book for YES shares shows:
- 100 shares available at $0.65
- 200 shares available at $0.66
- 500 shares available at $0.68
If you market-buy 350 shares, you will get:
- 100 shares at $0.65
- 200 shares at $0.66
- 50 shares at $0.68
Your average price is $0.661 instead of the displayed $0.65. That $0.011 difference is slippage.
How to Minimize Slippage
- Use limit orders — set the maximum price you are willing to pay. Your order will only fill at or below that price.
- Trade smaller sizes — break large orders into smaller pieces.
- Choose liquid markets — markets with deeper order books have less slippage.
- Trade on CLOB platforms — order book exchanges like Purrdict generally have better execution than AMM-based alternatives.
Slippage on Purrdict
Purrdict benefits from Hyperliquid’s high-performance matching engine, which processes thousands of orders per second. Combined with professional market maker participation, this results in deep books and minimal slippage for most trade sizes.