Do you have a guaranteed execution price on limit orders?
At Alpari, we don't have a guaranteed execution price on limit or stop orders. All orders are executed at the current available price in the market. During a period of high market volatility, such as following a major news announcement, a market gap can happen, which means that your limit or stop order may be executed at a price different from your initial requested price or the price you saw on the chart.
Example of negative slippage
A trader placed BUY limit for EURUSD at 1.12000 when the market ASK price is 1.13000. When the ASK price dropped to 1.12000, the BUY limit order is triggered and sent for execution. However, due to high market volatility, the price 1.12000 becomes unavailable and the next available price is 1.13000, so the market BUY order will be executed at 1.13000 (a less favourable price).
As such, the order has been executed with a negative slippage of 100 pips.
Example of positive slippage
A trader has requested to open an order BUY USDJPY with an ASK price of 131.500. Owing to high market volatility, the market price changes rapidly and 131.500 becomes unavailable while it's being sent to market for execution. The order is executed at the next available ASK price of 131.000, which is lower than the initial requested price.
As a result, the order has been executed with a positive slippage of 50 pips.
A trader has requested to open an order BUY USDJPY with an ASK price of 131.500. Owing to high market volatility, the market price changes rapidly and 131.500 becomes unavailable while it's being sent to market for execution. The order is executed at the next available ASK price of 131.000, which is lower than the initial requested price.
As a result, the order has been executed with a positive slippage of 50 pips.
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