how does slippage affect traders 
imagine a trader that wishes to purchase 100 shares of a stock that he sees is selling at 35 share he places the request with his broker expecting to pay 3 500 to open the position however if the asset is exceptionally volatile and a large number of other traders are buying shares at that same time by the time the broker executes the transaction the price has risen to 35 15 in which case the trader will pay 3 515 for the investment and already earned 15 the trade still may be a good one and if the price continues to rise the trader will see a profit and can close the position when he believes the time is right to do so alternately a trader wishing to go short on an asset that he believes will drop may ask his broker to execute a sell at 35 share only to see the price down to 34 50 by the time the sell is executed negative slippage can also occur which is to the trader s benefit as in the examples given above a trader wishing to open a long position at 35 may have his order executed when the price has dropped slightly or the trader opening a short position can see the price rise 