Slippage

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Nick_88
58
Nick_88  

Hi all, 

A question about slippage if anyone has time: 

Context: I understand in the world of retail trading, at times, we are limited by the shear speed at which the market can move during the time it takes to place an order and get it executed through an intermediary broker. Also, I believe levels of liquidity influence the magnitude of slippage, say, during a major news release.

However, I was wondering do major hedge funds suffer from experiencing slippage as well? I ask because I interpret slippage to be related to the speed at which a trade is placed, and in all cases (during a major news release at least) there will always be at least 1 buyer (or alternatively, seller) available in the market at every price. As such, whoever gets their preferred order filled 'first' avoids any slippage.. Is this understanding correct or flawed? 

I'm imaging that the millions of dollars of equipment installed by a hedge fund/banks surely must be used to increase their speed of execution (among other things). 

My interest is really around high impact news releases, the speed at which the market subsequently moves, the drastic increase in spreads that occurs (understandably) as a result, and if any increases in the speed of execution will make a difference to eliminating or reducing slippage in those few crucial seconds. 

Cheers, 

Nick 

Eleni Anna Branou
Moderator
6617
Eleni Anna Branou  
Nick_88:

Hi all, 

A question about slippage if anyone has time: 

Context: I understand in the world of retail trading, at times, we are limited by the shear speed at which the market can move during the time it takes to place an order and get it executed through an intermediary broker. Also, I believe levels of liquidity influence the magnitude of slippage, say, during a major news release.

However, I was wondering do major hedge funds suffer from experiencing slippage as well? I ask because I interpret slippage to be related to the speed at which a trade is placed, and in all cases (during a major news release at least) there will always be at least 1 buyer (or alternatively, seller) available in the market at every price. As such, whoever gets their preferred order filled 'first' avoids any slippage.. Is this understanding correct or flawed? 

I'm imaging that the millions of dollars of equipment installed by a hedge fund/banks surely must be used to increase their speed of execution (among other things). 

My interest is really around high impact news releases, the speed at which the market subsequently moves, the drastic increase in spreads that occurs (understandably) as a result, and if any increases in the speed of execution will make a difference to eliminating or reducing slippage in those few crucial seconds. 

Cheers, 

Nick 

Big major players, funds, banks and institutions trade with totally different and much quicker tools & platforms and they draw their liquidity from entirely different pools, so yes the don't suffer from slippage problems as we are.

But even if they do, due to larger orders or movements, they trade with much more longer term approach, so some slippage doesn't mean a thing.

Nick_88
58
Nick_88  
Eleni Anna Branou:

Big major players, funds, banks and institutions trade with totally different and much quicker tools & platforms and they draw their liquidity from entirely different pools, so yes the don't suffer from slippage problems as we are.

But even if they do, due to larger orders or movements, they trade with much more longer term approach, so some slippage doesn't mean a thing.

HI Eleni, 

Thank you for your response, and clarification. 

Do you know, does any firm/organisation/unofficial group or whatever, specialize in trading high impact news releases

Cheers, 

Nick

Eleni Anna Branou
Moderator
6617
Eleni Anna Branou  
Nick_88:

HI Eleni, 

Thank you for your response, and clarification. 

Do you know, does any firm/organisation/unofficial group or whatever, specialize in trading high impact news releases

Cheers, 

Nick

Many do that, but I couldn't suggest something in this forum.

Make your own search.

Nick_88
58
Nick_88  
Eleni Anna Branou:

Many do that, but I couldn't suggest something in this forum.

Make your own search.

Ok, thank you! 

Much appreciated. 

Yohana Parmi
4990
Yohana Parmi  
Nick_88:

Hi all, 

A question about slippage if anyone has time: 


Hi,

Slippage, that's what I fear most.
That's a natural event that is hard to avoid in the market.
It doesn't always exist, but it can happen.

Hopefully since this year regulated brokers are trying hard to prevent that,
especially in a high impact news.

have a nice weekend

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