tag:blogger.com,1999:blog-61260613063371806082012-02-16T16:29:04.362-08:00tomleslie1http://www.blogger.com/profile/17564822766274804656noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-6126061306337180608.post-12071151887630679092010-10-19T00:48:00.000-07:002010-10-19T00:48:19.434-07:00Slippage is the difference between the price at the time you placed your order and the price at which that order got filled. You may place an order to buy when a guinea pig is trading at $4, but your bill comes to $4.25. How come? Then the guinea pig goes up to $6 and you place an order to sell at the market, only receive $5.75. Why? In our daily lives we are used to paying posted prices. Here, at the grown-up Guinea pig factory, they clip you for a quarter buying and another selling. It could get worse. Those quarters and halves can add up to a small fortune for a moderately active trader. Who gets that money? Slippage is one of the key sources of income for market professionals, which is why they tend to be very hush-hush about it.<br /><br />No stock, future, or <a href="http://theoptionsstrategy.wordpress.com/">option</a> has a set price, but it does have two rapidly changing prices - a bid and an ask. A bid is what a buyer is offering to pay, whereas an ask is what a seller is asking. A professional is happy to accommodate an eager buy, selling to him instantly, on the spot - at a price slightly higher than the latest trade in that market. A greedy trader who is afraid that the bullish train is leaving the station overpays a pro who lets him have his stock right away.That pro offers a similar service to sellers. If you want to sell without waiting, afraid that prices may collapse, a professional will buy from you on the spot - at a price slightly lower than the latest trade in that market. Anxious sellers accept ridiculously low prices. Slippage depends on the emotional state of market participants.<br /><br /><a href="http://www.optionsstrategy.info/">Options strategy</a><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/6126061306337180608-1207115188763067909?l=theoptionsstrategy.blogspot.com' alt='' /></div>tomleslie1http://www.blogger.com/profile/17564822766274804656noreply@blogger.com0