BRYME Money · Markets & conditions
Order types and slippage: price versus execution
What your order requests, what the venue can deliver, and where the difference becomes a cost.
An order is an instruction; a fill is what actually happened. The last traded price is not necessarily the bid at which you could sell or the ask at which you could buy. Order type affects the price-versus-execution trade-off, but no button removes market risk.
Four instructions, four different constraints
| Order | What it requests | What it does not promise |
|---|---|---|
| Market | An attempt to buy or sell promptly at available prices. | A particular price, an immediate fill if trading is halted, or a single fill at one level. |
| Limit | Buy at the limit or lower; sell at the limit or higher. | Any fill at all, including when the market trades through a level without sufficient liquidity. |
| Stop-market | At a trigger, submit a market order under the firm's rules. | An execution at the trigger/stop price. |
| Stop-limit | At a trigger, submit a limit order under the firm's rules. | An exit; the limit can be left behind by a fast market. |
The SEC's explanation of orders distinguishes price from execution, and its stop-order bulletin makes clear that a stop price is a trigger, not an execution guarantee. Different venues and firms may use different quotes to trigger a stop; inspect your broker's rules before relying on one.
The gap that changes a planned loss
Suppose 100 shares are bought at $50 and a sell stop is set at $48. The nominal price distance is $200 in total. If adverse news arrives when the market is closed and the next executable sale is at $46.80, the realised price loss is 100 × ($50 − $46.80) = $320, before charges. The stop did not cap the loss at $200. A stop-limit might refuse the $46.80 fill and leave the position open to further losses. This is a simplified illustration, not a forecast or a recommendation for either order.
Spreads, partial fills and slippage
The spread is the difference between the best available bid and ask, and is a transaction cost even with no explicit commission. Slippage is the difference between the reference price used to plan an order and its actual execution price; it can be favourable or unfavourable. A large order may fill in pieces at several levels, so 'my order was accepted' does not mean 'my entire position was filled'. Thin order books, volatile events and extended hours can change these results.
A useful execution log stores the planned order, timestamp, quote, size, fee, actual fill(s), cancellations and what the venue reported. For market orders compare an executable quote, not yesterday's close. For limits record missed fills as well as completed trades; ignoring the former exaggerates performance. Include all round-trip costs when checking a strategy.
Five questions before pressing the button
- Is this a cash asset, futures contract or OTC product, and which venue or provider will execute it?
- What triggers a stop: last trade, bid, ask or another rule? How long does it remain active?
- Can the order partially fill, and what happens to the unfilled balance?
- What happens at a halt, a gap, outside normal hours or when the quote disappears?
- If an order is cancelled or rejected, does the platform show the final state before another is sent?
For broader vocabulary around long/short positions and time horizons, see types of trades. For the effect of a bad fill on risk, use the risk worksheet.
Sources and further reading
Links were reviewed 2026-09-24. Regulatory permissions, firm status and product terms can change; use the current official register before acting.
General information, not financial advice. Everything on BRYME Money is educational. Trading forex, crypto and derivatives involves substantial risk of loss and is not suitable for everyone. Past performance — including any published research — does not guarantee future results. Never trade money you cannot afford to lose.