Slippage Meaning: Definition, Examples, and Translations
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slippage
[ˈslɪpɪdʒ ]
Definitions
financial context
Slippage refers to the difference between the expected price of a trade and the actual price at which the trade is executed. This phenomenon typically occurs in volatile markets where prices fluctuate quickly. Traders experience slippage when there is a change in the market price between the time they place an order and the time it is executed. It can result in losing money on a trade due to unfavorable execution conditions.
Synonyms
difference, discrepancy, variance.
Examples of usage
- I experienced significant slippage while trading stocks during the news release.
- The slippage on my forex trade was higher than anticipated.
- Traders should factor slippage into their overall trading strategy.
general use
Slippage can also refer to the act of slipping or a gradual sliding out of place. In a more abstract sense, it might describe a situation where progress is slower than expected or where plans fall apart. For instance, deadlines might experience slippage if unforeseen circumstances arise.
Synonyms
Examples of usage
- There was slippage in our project timeline due to unexpected delays.
- The slippage of the schedule frustrated the team members.
Translations
To see the translation, please select a language from the options available.
Interesting Facts
Finance
- In trading, slippage can occur during high volatility, where the price changes quickly.
- It can lead to traders buying or selling at less favorable prices, impacting profits and strategies.
- Understanding slippage is crucial for risk management and effective trading.
Psychology
- In behavioral studies, slippage can refer to lapses in self-control, like when you intend to stick to a diet but slip up occasionally.
- The concept relates to cognitive overload, where too much information can lead to mistakes or missed actions.
- Identifying personal slippage can help in setting better strategies for success in goals.
Technology
- In software development, slippage can happen when project timelines are not met, causing delays.
- The term is often used in agile methods to describe tasks that do not get completed on time.
- Understanding technical slippage can help teams prioritize tasks and improve workflows.
Everyday Life
- Slippage can also refer to small accidents, like when a glass slips from your hand and falls.
- It's common in sports, where a player might slip and miss a goal or catch due to losing their footing.
- In project planning, slippage refers to tasks that take longer than anticipated, impacting deadlines.
Origin of 'slippage'
Main points about word origin
- The term originated from the word 'slip,' which means to slide or move out of position.
- It first appeared in English in the late 19th century, often related to financial terms.
- Slippage in finance refers to a difference between expected and actual price when trading.
The term 'slippage' originates from the verb 'to slip', which has its roots in the Old English 'slypan' and Old Norse 'slypa', both meaning to slide or glide. The addition of the suffix '-age' is used in English to indicate a state or condition. Slippage began to be used in financial contexts in the late 20th century, particularly with the growth of more rapid electronic trading systems. As trading became more high-speed and automated, the concept of slippage became increasingly relevant for traders looking to understand the dynamics between their orders and market movements. It has since evolved to encompass not only the idea of price discrepancies but also broader implications in timing and execution.