Ever clicked “buy” at a price and then ended up paying more? Or clicked “sel”" and got less than you expected?
That’s negative slippage, and it's a major pain in the backside for crypto traders.
There’s also positive slippage (the market moves in your favor)…but you never see that on most crypto exchanges. Why? We’ll explain that and why you do see it on Ouinex!
First, let’s dig into what slippage is and why it happens.
What Is Slippage?
It’s when you click to buy/sell at one price…but get another.
Imagine walking into a supermarket and picking up a piece of cheese for $10…but when you get to tills, it’s $11. Because, well, the market moved in between when you picked up the cheese and you got to the till, so the cheese now costs more.
That’s slippage. It is the difference between the price you expect to get when you execute a trade and the price you actually get.
What Increases Slippage?
If there are more buyers of cheese than people who are available to sell (or vice versa), so there’s a long queue, it takes longer to buy the cheese (poor liquidity). This means the market is more likely to move in between when you decide to buy the cheese and you actually get it to the till (the time it takes to execute the order).
If the person behind the till (the exchange) is very slow, you’re also more likely to get slipped as more time passes between when you decide to buy and the purchase goes through.
Lastly, if the market is very volatile and prices change fast, it’s also more likely that the price changes in between when you decide to buy and the order goes through.
In more technical terms:
Why Does Slippage Happen?
- Volatility: Crypto is notorious for its price swings. The more volatile the market, the more slippage you’re likely to experience.
- Liquidity: Liquidity is how easily an asset can be bought or sold. Low liquidity means fewer buyers and sellers, which can lead to larger price changes and more slippage.
- Slow Execution: The longer it takes to execute an order, the more likely you are to get slipped.
- Exchange Issues: Some crypto exchanges using the CLOB (Central Limit Order Book) model, can have issues that increase negative slippage for retail traders.
The CLOB and Slippage
The Central Limit Order Book (CLOB) is the standard order-matching system. It's supposed to be fair, but...
- Institutions with super-fast trading tools can "front-run" your orders, grabbing the best prices before you can. Basically, they have faster tools and can snap up the best prices while you’re still clicking to execute.
- This means you get filled at a worse price. More slippage.
Ouinex's Solution
Ouinex's no-CLOB model is designed to reduce slippage:
- We separate retail traders from those big institutions, so the institutions can’t front-run you. That means you get both positive and negative slippage on Ouinex.
- We work to ensure deep liquidity, which also helps to minimize slippage.
- We offer lightning fast execution, which also minimizes slippage.
- We show you the estimated slippage before you click to execute a trade.
- We have a slippage control tool so that you can set the maximum negative slippage you allow only the part of the order (if any) that can be filled below that level gets filled.
The Bottom Line
Slippage is the difference between the price you click to execute on, and the price you actually get. Poor liquidity, slow execution, and a volatile market increases the chance of slippage in either direction. If you use a crypto exchange that uses the CLOB execution model you’re likely to only get negative slippage, even if they have deep liquidity and fast execution, because the big financial institutions have faster trading tools and will snap up the best prices before you have a chance to do so.
Key Takeaways:
- Slippage is the difference between the price you click on and the price your order is executed at when trading.
- You can get positive slippage (the market moves in your favor) or negative slippage (the market moves against you).
- Poor liquidity, slow execution, and a volatile market increases the chance of slippage in either direction.
- If you trade on a crypto exchange using the Central Limit Order Book (CLOB), you’re more likely to get negative slippage, even if the exchange offers deep liquidity and fast execution, because the big financial institutions have faster trading tools and will snap up the best prices before you have a chance to do so.
- Ouinex offers a no-CLOB execution model that separates financial institutions from retail traders, plus we offer deep liquidity and fast execution. That means you get slipped a lot less, but when there is slippage it can be either positive or negative. We also show the expected slippage as you trade, and offer a slippage control tool so you can set the maximum negative slippage you allow.
Slippage FAQs:
What is slippage in crypto trading?
Slippage is when the price you click to buy or sell at isn’t the price you actually get. It happens when the market moves between the time you place the order and when it gets filled.
Is slippage always bad?
No. Slippage can be positive or negative.
- Positive slippage: You get a better price than expected.
- Negative slippage: You get a worse one.
On most crypto exchanges, you almost never see positive slippage. But on Ouinex, you can.
What causes slippage in crypto trading?
Slippage is caused by:
- Volatility – When prices move fast, slippage happens faster.
- Low liquidity – Fewer orders on the book = more price impact.
- Slow execution – If the exchange is slow, you get slipped.
- Front-running – On CLOB-based exchanges, institutions grab the best prices before you can.
Why do I keep getting negative slippage on my crypto exchange?
Because you're probably trading on a CLOB (Central Limit Order Book) platform. Institutions with lightning-fast tech front-run your trades, scooping up the best prices. You get what’s left.
How does the CLOB model increase slippage for retail traders?
In a CLOB model, everyone sees the order book including big institutions with high-frequency trading tools. They react faster than you can, taking the best bids/offers before your trade executes. That means more negative slippage for retail traders.
How does Ouinex reduce slippage?
We ditched the CLOB. Our no-CLOB execution model separates retail traders from institutions. Market makers can only make prices, not take them.
- You don’t compete against big financial institutions, which means they don’t snap up all the best prices first, meaning…
- You get access to both positive and negative slippage.
- We have deep liquidity and lightning fast execution, so orders get filled fast.
- You see estimated slippage before placing a trade.
- You can set a maximum slippage limit so you’re always in control if the slippage goes over that, only the part of the order that was below gets filled.
Can I control slippage on Ouinex?
Yes. Ouinex gives you access to a slippage control tool. You set the max negative slippage you’re willing to accept. If it goes beyond that, only the part of the order within your limit gets filled.
Why don’t other exchanges offer positive slippage?
Because on most exchanges, especially those using the CLOB, big institutions always beat you to the best prices. They take the upside you take the hit. Ouinex flips that script.
How do I know what the slippage will be before I trade?
On Ouinex, you see estimated slippage in real-time before you place the trade. Most exchanges only tell you after the fact when it’s too late.