Slippage
How Slippage Happens
Slippage refers to the difference between the mark price and the actual price at which a trade is executed. Slippage most frequently occurs with market orders, which aim to execute immediately at the best available price. When placing a market order, the quoted price offered by OLP will likely be different from the current mark price. This price difference is slippage.
Avoiding Slippage
While it's difficult to ever completely eliminate the impacts of slippage on trading, there are a number of strategies and configurations you can use to minimize the amount of slippage you face.
Set a slippage limit: Omni allows you to input a slippage limit when opening market, take profit, stop loss, or trigger orders. For market orders, if the slippage limit is exceeded, the platform will reject the order. For trigger, take profit, and stop loss orders, the platform will monitor the order until both the trigger condition is longer fulfilled and the slippage limit can be respected, at which point the order is processed.
For example, If you open a buy order with a slippage limit of 0.5% at a mark price of $100, you're instructing the platform to reject your order if the execution price ends up being at or above $100.5.
Use smaller sizing: Large orders are more impacted by slippage than small orders. When entering and exiting a position, consider moving in multiple small trades instead of one large trade, giving OLP more opportunity to source liquidity at your desired price level.
Use limit orders: Limit orders allow you to set the exact quoted price you want your trade to execute at, helping avoid the slippage caused by immediate execution of market orders. If you're willing to wait for favorable price movements for your order(s) to be filled, consider using limit orders.
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