With respect to futures, it is the difference between estimated transaction costs and the actual cost paid. Such unexpected costs arise from liquidity costs and frictional costs. Slippage can also be defined as the difference between the average execution price and the initial midpoint of the bid-offer range of prices as quoted for a specific quantity underlying an order.
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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