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Slippage

Slippage is the difference between the price a trader expects to pay (or receive) for an event contract and the actual price at which the order is filled, caused by insufficient liquidity at the desired price level. It is most common on large orders or in thin markets.

Updated June 25, 2026Trading & Pricing
TL;DR
Slippage is the cost of moving the market with your own order. The bigger your trade relative to available liquidity, the more you overpay on the way in and undersell on the way out.

Key Points

✓Slippage occurs when a market order consumes all available contracts at one price level and fills the remainder at worse prices.
✓It is most severe in shallow markets with little depth of market beyond the best bid or ask.
✓Even a 5,000-contract order can move a thin prediction market price by several cents, creating meaningful slippage.
✓Using limit orders instead of market orders eliminates unexpected slippage but risks the order not filling at all.
✓Breaking a large order into smaller chunks executed over time is a common slippage-reduction strategy.

How Slippage Happens in Practice

Imagine you want to buy 1,000 YES contracts at the current Market Price of $0.60. The Order Book shows only 300 contracts available at $0.60, another 250 at $0.61, and 450 at $0.62. A Market Order will fill 300 at $0.60, 250 at $0.61, and 450 at $0.62, producing an average fill of roughly $0.613 rather than the expected $0.60. That $0.013 gap is slippage. The thinner the Depth of Market, the steeper the slippage curve. On Polymarket, flagship markets with millions of dollars in Open Interest absorb large orders with minimal slippage, while obscure markets can move double digits on a few thousand dollars of flow.

Minimizing Slippage as a Trader

The primary tool for controlling slippage is the Limit Order: by specifying a maximum acceptable price, you avoid filling at unexpectedly bad levels, though you risk missing the trade entirely if the market moves away. Checking Depth of Market data before placing a large order helps estimate likely slippage in advance. Splitting an order into smaller tranches spread over time allows the Order Book to replenish between fills. Line Shopping across Kalshi, Polymarket, and other venues may reveal one platform with significantly deeper Liquidity for a specific contract. Traders calculating Expected Value must account for round-trip slippage costs alongside Trading Fees and the Bid-Ask Spread to determine whether a trade truly has Edge.

Related Terms

Depth of Market
Depth of market (DOM) is a measure of the volume of buy and sell orders available at various price levels beyond the best bid and ask in an event contract's order book. Greater depth means the market can absorb larger trades without significant price disruption.
Order Book
An order book is the real-time electronic ledger that lists all outstanding buy (bid) and sell (ask) orders for an event contract, organized by price level. It is the central mechanism through which prediction market exchanges match buyers and sellers.
Liquidity
Liquidity in a prediction market measures how easily a trader can buy or sell contracts at prices close to the current market quote, in meaningful size, without significantly moving the price. High liquidity means tight spreads, deep order books, and minimal slippage.
Market Order
A market order is an instruction to buy or sell a prediction market contract immediately at the best available price, consuming existing resting orders on the order book. It prioritizes speed of execution over price certainty.
Bid-Ask Spread
The bid-ask spread is the gap between the highest price a buyer is willing to pay (the bid) and the lowest price a seller is willing to accept (the ask) for an event contract. This gap represents an implicit transaction cost every trader pays when entering or exiting a position.

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