Alright, you might’ve read the post on OTC gains, well that’s old news. So move aside OTC Gains, I’ve got something gewd for this steaming hot post fresh off the printing toilet, (that can also be combined with OTC gains, lol).
Wat do Stonk Slippage be do?
Thank you for the question in perfectly formatted Angles, I will now address the question after filibustering and wasting more of your time by stating irrelevant facts until my time is up. Oh, this isn’t a congressional Testimony? Hell, I thought I was going to talk about being a Young Boy From Bulgaria.
Well, alright then, to talk about slippage we have to define
So the exchange and markets are made through connecting a buyer and a seller, then they partake in the whole ritual of ‘trade’ in exchange for goods and cash.
The Buyer throws a Bid price for how much they are willing to pay, say $10 for a golden turd.
The Seller throws an Ask price for how much they are willing to part for a golden turd, say $11.
Now you have a Bid, and an Ask, the difference between the bid and ask is called the Spread.
Spread = Ask – Bid
= $11 – $10
= a Dollar Spread
So a Market Maker or a broker will help arrange the Bid and Ask to touch, so they can gingerly touch tips and execute a trade. They route the orders to market or provide a counter party that takes up the trade, or even take up the trade themselves.
Sometimes a Market Maker will provide liquidity or trade and take the other side of the trade, to make more trades happen faster. Typically they do this because they like the underlying stock, or they collect commissions directly, or they manage their risks and feel it’s in their best interest to internalize the trades so they never see light of day. . .
*awkward pause until you realize the implications of the previous sentence*
Whatever the case, Market Makers make, well, the market.
Side note, you know what else also feels like Sex? Allegedly, Blow. Cocaine. Yay—Yo. Why do you think so many traders do coke? It’s to chase that Trading high, the visceral adrenaline and stress mixed with pure p-p-p-power that you get from swinging big-dick energy everywhere. . . Or So I’m told, *ahem*.
We have tools that track the Bid and the Ask, even graphical representations sometimes referred to as the ‘order book’, these tend to be behind a pay wall or licensing or something. It’s great that you have to pay for all of this privatized public-information in the “”Free Market””, yea, real great.
Here is a look at the Order Book (sometimes referred to as Level 2 or Level 2 Order Book);
So Don’t put your chips in on bad info, you’d be better off in a level 3 order book, but you don’t have the HFT capabilities to really react in time. And not only that, you’re fucked by an algorithm anyway.
The only real order book is to get to Level 5 Order Book and you’ll be set.
Which one is a level five? The Market Manipulating one, the one that sets the prices. lmayo.
Now that we’ve covered our spread appetizer, on to the main course,
Slippage is the difference between the expected price of a trade and the actual price you get at fulfillment.
Say, you sold something for $11 dollars, but it got executed at $10.999901 dollars instead.
Sometimes, like the scenario above, you can get slippage that goes against your favor.
Sometime, the slippage can be positive, where you sell something for more, or buy something for less.
That difference, fractions of a penny at times, is called ‘slippage’. And this is all due to a bunch of HFTs and algorithms circle jerking their race to zero, while also slaving at their Master’s Arbitration rules set forth by some Quant Lingo code. What I’m saying is, slippage is sometimes a natural ‘accident’, and sometimes intentionally ‘priced in’.
Let me say that again, sometimes intentionally ‘priced in’. Ya look like an easy fella, so I wanted a little more umph on some emphasis.
Slippage is simply the difference between ‘Final execution price’/‘fulfillment price’ and ‘intended execution price’/’expected fulfillment quote’.
Generally when slippage occurs, it occurs in market orders,
When people talk about Slippage, people say things like they occur with Market Orders, because they try to ‘get you best price’ for your execution. (That isn’t always the case.)
When you place your order and ask for a ‘Market Order’ type, the Broker takes a quick look-see at the market, and tries to get you whatever the best price is.
If you’re buying, they’ll try to match you up with the lowest Ask.
If you’re selling, they’ll try to match you up with the highest Bid.
This is of course, how it was supposed to work. Lmao. Which I’ll deconstruct but for know, enjoy the wisdom of this meme;
Also, side note, trading on your phone with that shitty wireless ISP that’s cucking you for bandwidth with other remote users and packet sniffing goons, yea you’re gonna have a shitty delay compared to the milli and micro second trades by HFTs. Good luck thinking you can win when there are possible artificial bloatware-limiters that intentionally cause delay and lag on your cellular device. I can’t say if it exists or not, you’d have to look into the ‘source code’ if you want your proof for the troof (troof is truth but spelled retardedly).
Another way for slippage to work, is similar to robbing you blind.
In a limit order, if you set a buy limit at $13, and the Market Maker sees and offer to sell/ask for $10, then guess what you could be buying that at?
That’s right, $13, where the Market Maker profits the difference. Pocketing that $3 diff.
In this case, you don’t get a better price, but you do get the price that you wanted. So it’s not a bad deal per se, but they’re taking your money. lmao. This is theoretically happening with some limit orders.
Technically, if you have large orders, someone might look at this trade for foul play, like a wash sale, or spoofing, or some shit, and they might actually pin the blame on you for trying to buy shit at a higher/over-valued price. You know, it looks like you were trying to manipulate the price upwards.
What I’m saying is, Limit orders can also be affected by slippage.
I mean, what happens when a Limit-Buy order meets a Market-Sell order? I’ll tell you, it’s a slippery slope into some Sewery Slippage. Because Order types don’t exist in a vacuum, especially in these markets.
Sometimes if you use a Stop Loss Order, you can get slippage. This Slippage happens in a way that makes you exit your positions, even if the price never hits your Stop Loss. And of course, when it does, it magically rebounds and goes up after your position is no longer there.
Huh, if you weren’t any wiser, you just might still have a hunch that something fucky is going on there.
I have a friend that day trades like a degenerate and he has a stop loss, apparently the Spot price may never touch his stop loss, but due to the nature of slippage, it executes his stop loss to sell. At, a loss.
This usually happens when the market has a reversal and shoot to the moon after leaving you paper-handed. What a fucking slick move these Brokers/Market Makers are doing.
So when you use Stop Losses, you have to account for slippage or else something like this will happen;
And then your Stop loss hits/executes even though there is a visible gap between the Stop Loss and Spot Price.
Thank you slippage, Here’s the same thing but in chart format;
Let’s zoom in to see the gap and watch the slippage ‘execute you’ out of more gainz,
Get Tapped on your stop loss and paperhand as things shoot bullish into the stratosphere. Man, isn’t it lovely to lose all those unrealized gains? Really makes you want to try and ‘do better Next time’. What an Addictive ‘I could have had it if only I’-type strategy they’re playing. What a Casino.
This Stop Loss Slippage can be a very shitty thing for a bunch of retards grouped together with stop losses. Day traders and other degens create really shitty support levels because they telegraph their Market Orders (i.e. Stop losses) to the entire market, showing a great price point to ‘tap’ and then perform a reversal. So these Market Makers or heavy hitters (better Day Trade-tards with more money), hit the Stop losses, and then switch to bullish to leave you behind.
In fact, it makes it very easy for a telegraphed reader to decide to short the shit out of a security and profit by breaking all these easy peasy resistance. They could hit multiple ‘Stop Loss Sell Walls’ on the way down, which drive a more bearish momentum and drops the stock like fucking crazy. Here’s GME for instance, this took advantage of margin calls and Stop Losses;
I just want you to know that slippage is real and it happens to various types of orders, not just market orders, and it’s kind of rigged (not going to lie).
No one’s going to tell you about this Trading dynamic-shit unless you’re lucky, so feel free to account for Slippage when you trade like a trade-tard. You’re welcome, and if you win a lot of money because of my advice, then Congratulations and Fuck you.
Sometimes Slippage is a good thing,
(Well, at least in theory.)
Sometimes you can get a better slippage, like make more money, often times, the system is made in a way that you never get the best-best price. You see, you gotta pay the gas fee.
Which is fine (in theory), because let’s say,
A Market Maker takes your quote, let’s also say that you want to sell $SHIT at $11,
They find a buyer who wants to buy $SHIT for $12
The Market Maker fulfills your sell order at $11.8, and they might pocket .10 cents, while offering a discount to the buyer for $11.9.
In this way, everyone wins, because everyone gets a good/better deal. And in theory this is what SHOULD happen when we work in markets, but often this is not what actually happens, and it usually ends up with Buyers and Sellers getting the short end of the stick while Market Makers pocket a huge difference.
So the bigger the spread, the better the profits for the Market Maker.
And the bigger the slippage, the better the profits for the Market Maker.
Bottom line, the better the profits for the Market Maker.
How can I say Market Makers do this?
Because I’ve seen the archived logs of corruption and malfeasance that Market Makers do, It’s LITERALLY public information that anyone with an internet access can look up. Use a Broker Check, look at Finra sanctions and fines, and look at the SEC or FINCEN or DOJ (Department of Justice) reports. Check out some press releases too, there’s at least several financial crimes and infractions committed every month.
A good chunk of them are ‘happy accidents’ but if you;
Profit more ‘making the mistake’ than the cost of ‘paying the fines for making a mistake’, then that’s just the cost of business.
And slippage happens to nearly/virtually all/every trader;
And guess who gets to control the market at Fractions of a second using HFTs?
Uh, ding-ding-ding, Market Makers.
Why is Liquidity and Trade Volume King?
Alright, I threw a random question out there to prime you into thinking about the question you should be asking. No need to thank me, I know I’m good. See, you don’t even have to think when I spit fax. Just blindly trust me and I’ll rob you, blindly. It’ll be great.
Just as Matthew McConaughey said, it’s all ones and zeroes going ping and pong or something;
Simply Don’t change the rate you charge, just pocket the difference.
Broker’s want more traders, so they can have more transactions. Not only do they profit on commissions and other incentives, they also get to up their trade volume, executions, metrics, Assets Under Management, and other numbers to fluff their ‘prospective investing shits’ to sell someone some investard some bad pussy.
But also, brokers want to up their trade volume because slippage benefits by number of trades. What you end up getting, is a buyer and seller that loses pennies, and a Market Maker making those pennies.
Pennies per each transaction.
Not per trade per se.
But each equity that is being traded.
So if you made a penny from the slippage of each equity being traded, 500 trades would net you $50, but 5000 trades would net you $500. Why make a penny on five thousand trades when you can make a penny off of five hundred thousand trades?
‘Those are Rookie numbers in this racket ‘
I mean, why else would there be a Market Maker providing the liquidity for an idiosyncratic risk of a stock on January 28th -ish 2021 time frame? You know, the type of trade volume where the entire float was traded three times in the span of a few days. . . Let that sink in, that everyone had to sell and buy their shares three times, and that’s including the shares owned up by Institutions and long term holders. So they traded the entire market cap with just the float. . . You feeling the rigged game yet?
“I’m not feeling the love on this site. Trading is a tough game. Don’t you think?”
Also, the idea that High Liquidity markets means low volatility, is actually price fixing and technically Market Manipulation. Its just apparently sanctioned by the SEC under Supplemental Liquidity Pools/Providers (SLPs) because they got conned or aren’t doing their job. This ‘High’ or ‘Supplemental’ Liquidity would help, in theory, to avoid slippage by having a stable price indexed for the bid and ask spreads that the algorithms trade off of. . . But it’s market manipulation, and if you ‘can’ spoof orders to move the price, then the Market can be Manipulated in a direction unfavorable against the majority of retail and smaller traders, or ‘alpha’.
Spoofing orders are illegal, but Banks do it all the time, and they usually get fined after multiple instances for a fee less than the profits. So. . . They ‘can spoof’ lmao.
This is all why brokers and Market Makers WANT and incentivize traders to ‘supply liquidity’ and provide ‘trade volume’ for specific assets. This is why Market Makers want liquidity and higher trade volumes.
To increase their bottom line by raising volume for more slippage.
But the theory here applies on Forex and Crypto markets, because Stonks are more regulated from brokers directly advertising you to a pump and dump scheme in which they would be liable if they were honest.) And, I mean, a ton of Markets in the Crypto world are advertising for specific shit coins and providing incentives to lure Degen Traders to gamble and ‘play’ while providing liquidity to select coins.
US Stonks and brokers and market makers can’t advertise a specific equity to increase it’s liquidity or trade volume directly. Rules and shits.
Instead, the US Capital infused Wall Street turn to the Mocking Birdesque-Pravda-Samizdat Propaganda machine to churn some press to FOMO buyers and sellers to play into pump and dump schemes, or even meme stonks. They label these people as opinion guests, thereby the media sites can shirk the direct liability of you being retarded. Which, I mean, look at you(r portfolio).
All of this to incentivize new Trade-tards to yeet their money in US equities, to be scammed and farmed as a cash crop known as Alpha. Hence, ‘Alpha Capture’. *sigh* it really is a shit world,
And it’s Great
The Market is supposed to minimize slippage;
There’s this thing called NBBO;
Where, per some rules and regulations by SEC and Finra, the Market People are supposed to give you a rebate if they fucked up the price. Key words, Supposed to.
And if they’re a smart Con, like me, they’ll give you a rebate,
just not the whole thing.
See, If I scam you for a few pennies every trade, and give you back a fraction of what I scammed you, then you’ll think I’m on your side and honest. It’s a simple con-trick. Say I stole $2 under your nose, If I give you back $1 and said I accidently took too much, then you’ll think I’m an honest and up-front man.
You feel happy that I’m giving some of your money back, I’m happy that I’m taking your money and making money. Everyone wins. Technically a win-win trade, so as long as you don’t get wise and realize I’m parasitically leeching cash from you. But also, if you are none-the-wiser, ignorance really becomes bliss, and you are more joyous and happy that I’m giving you your money without even know that I’m quite succinctly and metaphorically ‘robbing you blind’.
Wow-ie, you’re an easy fella, smooth around the eyes and even smoother around the brain. What a good schmuck you, I’m gonna Twice over you with a Long Con, per trade, every now and then I’ll give you some of yer money back.
Once you give me more of your trust, I commodify that trust and sell it, or leverage it to steal more from youz, It’s all part of a simple con.
Speaking of winning your trust, do you have a watch?, I need to know the Time and I left my phone at my high-rise when I came out in a rush to get dressed, I have my first interview in a few minutes with that Bank right down the street. . . Actually, on second thought, would you actually mind letting me borrow that watch; I think it would help if I look more articulate and sophisticated.. I promise to return it after the interview, it’s in a few minutes, I am just applying for a nice position as Managing Director, So I’ll treat you to dinner next week, here write down my number real quick and Text me in a few and I’ll respond back to you when I get back to my Condo. You don’t have to wait for me, but I’ll be out in an hour or so. Thanks pal, I’ll treat you one for sure.
*I proceed to walk towards the bank, go in, ask to use the back exit because I’m avoiding a stalker ‘you’ and I get escorted out, and you never see from me again*
Like stealing candy from a baby, lmao.
You have to agree with me for this segment because my logic is pretty air tight. You see, my logic here is that either market makers con you, or that you trust in my ability to con other people. Regardless of what you believe, you’re still getting conned. Because if you think the Market Makers are playing fair, then go ahead and gamble in these markets. You might win, but I doubt you’ll be the one that’s the real winner. Ignorance is Bliss, and without naive folks like youz to gamble in these markets, then Teachers wouldn’t have a job in the world.
It’s a, whatcha-ma-calls-it, a catch-22. Checkmate, because you’re damned if you believe me, and damned if you don’t. That’s how the Truth works cupcake. (unbearable, I know, life-is-sufferig, yidi-yada-yada)
But let’s talk about NBBO a little more,
Do you think brokers have to play fair?
If you didn’t believe me before, let me lay some pipe on ya.
What, it’s not like there is some sort of regulation or rule where Brokers are to give you the best price and refund you the difference, right? Oh wait, there is! Remember that NBBO that I mentioned earlier?
It’s called NBBO or National Best Bid Offer, and Brokers are supposed to give you the Best Bid Offer Nationally on all US exchanges for US Equities.
But of course, there’s a twist.
Dark Pools and other Tricks don’t always abide by NBBO. Here’s a meme and a link;
The SEC Chairmen said that Price is not always reflected in the NBBO, specifically he called out Dark Pools. Also, side note, the NYSE President/CEO also said that Price of securities are not always accurate. Tough game, dontcha think? By all means, if you weren’t convinced, check out and read the scoop on Dark Pools V.
Hell, Even the Derivatives market has slippage. Technically all markets do. Do you think that options, swaps, and other shit tools that are open to retarded ‘dumb money’ retail investors aren’t also being manipulated?
Yea, think again.
Turns out, if there’s a market order, then you’re probably going to get some slippery fulfillment on that trade.
So uh, yea,
You can try and avoid slippage by avoiding a Market Order,
Don’t worry, even if you decide not to take a market order, and set a limit price.
With the advent of Payment for Order Flow and Dark Pool Internalization,
Brokers and Market Makers can take the other side of virtually all trades, and internalize the trades while issuing an ‘IOU’ in the form of cash not settled or the underlying security not settled. Never having delivered what is owed to you. The Market Maker is allowed to have some privileges to ‘help make the market’, so they just have to ‘arrange’ for the fulfillment of the money or underlying security in the future, sometimes referred to as being Delta neutral or hedging or exposure or naked/covered, or insert vague remotely tangential word here.
(Which, the Market Makers could completely ignore based on inside information of market manipulation. Thereby Market Makers don’t have to hedge their risks and remain Delta neutral, because that’s literally what they did in this report.)
So a Market Maker, could in theory, take ALL the trades and (re)route them, all to;
Decide the Price you get
But that’s a story for another Day, I’ll name it Temporal Slippage, so keep an eye out for that Article.
Here is some supplementary information;
Slippage in Finance per Wikipedia
Coin market Cap talking about Crypto Slippage
The Balance talking about Slippage
CFI just reiterating the things said above
Honestly, This article I wrote has more and better information about Slippage than these other supplementary information that is being written, simply because I did the research into thinking of how to ‘maximize slippage’ For Profit of course.
Because Profit Matters.
Also I gave some tips on how to account for slippage simply by being aware of it. So, have a bigger margin of error, or don’t gamble, lmao.
I talked about Slippage, making money on Volume and capitalizing on volume.
It’s not like there are two large market makers that are creating a Trust to oligarchically monopolize trade volume in the US equities markets, thereby profiting on Slippage and other underhanded means.
Hey, uh, don’t let me catch you slippin’ in these markets, or you about to get whacked,
* Not Valid Financial, Legal, Life, or Any Advice