Calculator
Use this before the order goes in, not after you discover the fill was worse than expected. The point is to force realistic execution assumptions into the decision while you still have the option to reduce size or skip the trade.
Quoted trade
Execution drag
Use this with realistic depth assumptions. Slippage that looks small in percentage terms can erase a trade once the contract count scales up.
What slippage actually means in prediction markets
Slippage is the cost of turning a quoted opportunity into a filled trade. In a thin order book, the best displayed price may only exist for a tiny amount of size, so your average fill can be worse than the screenshot that first caught your attention.
That problem compounds when you need both entry and exit execution. A trade can start with a clean-looking expected profit and still disappoint if the entry lifts offers, the exit crosses a thin bid, or both happen at once.
- Entry slippage raises your cost basis.
- Exit slippage cuts the price you can realize later.
- Fee drag and slippage often hit the same trade together.
- Thin books punish larger size disproportionately.
How to model realistic slippage instead of wishful thinking
Start with the price and contract count you actually want to execute, then estimate how far through the book you would need to trade to complete that size. If you have to sweep multiple levels, your slippage assumption should reflect the weighted average fill, not the first visible line.
When you are uncertain, bias the assumptions against yourself. Conservative slippage estimates protect capital far better than precise-looking numbers based on unrealistic liquidity optimism.
- 1Enter the quoted entry and exit prices from your plan.
- 2Estimate entry and exit slippage separately based on depth.
- 3Add fees and fixed movement costs.
- 4Check whether the trade still clears your required edge.
Worked slippage example
Suppose you plan to buy at $0.46 and exit at $0.58 on 400 contracts. The quoted PnL looks attractive, but once you add 0.4% entry slippage, 0.5% exit slippage, fees, and fixed cash costs, the net result changes materially.
This tool shows both the slippage cost and the adjusted entry and exit prices so you can see exactly how the edge erodes. That is much more actionable than simply telling yourself that the market felt a little thin.
- The quoted trade can remain profitable while the executable trade degrades sharply.
- The max-slippage outputs help you stress-test a planned size.
- A small edge should usually be rejected if it only survives under optimistic execution assumptions.
The slippage mistakes that usually distort trade decisions
The biggest mistake is using top-of-book prices as if they represent your full intended size. The second is assuming only entry matters when the exit is often where thin markets punish the trade most.
Another common error is keeping slippage separate from fees and flat costs. In real execution, those frictions stack together, so the right question is total drag, not isolated line items.
- Treating displayed quotes as executable size
- Ignoring exit-side liquidity
- Using a single slippage number for both legs when the books differ
- Approving a trade that only works under ideal fills
If the trade only works when slippage is near zero, the trade is not robust enough. Good execution assumptions should be conservative and still leave a reason to act.
Sources
These references support the assumptions and workflow guidance on this page. Always verify current platform rules before relying on a calculator preset.
Internal guide connecting execution quality, fees, and slippage to arbitrage outcomes.
Internal guide on finding edge before accounting for execution drag.
Official API documentation for traders who want to inspect live book data and execution conditions.