Optimizing Trade Execution with Slippage Tolerance Settings

When you place a market order, price volatility between submission and execution can significantly impact your final price. This is where slippage tolerance becomes essential—it sets a price boundary that protects you from unexpected price movements while ensuring your trades execute when market conditions align with your expectations.

Understanding Price Protection in Market Orders

Slippage tolerance is a powerful risk management feature that lets you define acceptable price deviations for market orders. Instead of accepting whatever price the market offers when your order fills, you can now control the maximum acceptable price difference—either as a fixed amount or a percentage. This functionality is available across Spot, Spot Margin, and Futures trading to give traders comprehensive protection regardless of their trading style.

The feature works by converting your market order into a conditional limit order that only executes within your specified price range. When slippage tolerance is disabled, your order behaves as a standard market order with no price restrictions. When enabled, your order becomes selective—it will only execute if prices stay within your tolerance parameters.

Key Benefits of Managing Slippage Tolerance

Protection during volatile execution is the primary advantage. In low-liquidity futures markets especially, prices can swing dramatically during order processing. Slippage tolerance reduces excessive price movement impact on your execution.

For faster transactions compared to traditional limit taker orders, slippage tolerance offers an optimized middle ground. Instead of anchoring to Ask1 (for buy orders) and Bid1 (for sell orders) prices rigidly, you set your own acceptable deviation range, enabling quicker fills while maintaining price discipline.

The feature also guards against extreme price spikes and dips that typically occur with standard market orders. By combining market order speed with limit order price protection, slippage tolerance gives you the best of both execution worlds.

How Slippage Tolerance Operates: Disabled vs. Enabled

When disabled: Your market order executes as a traditional market order without any slippage restrictions. Your transaction processes at the current market price regardless of how much the price has moved.

When enabled: Your market order behaves like a limit order, only filling if the price remains within your tolerance band. You can set your tolerance using two methods.

Configuring Slippage Tolerance by Amount or Percentage

Setting by Amount

With amount-based configuration, you specify a fixed deviation from the Ask1 price (for purchases) or Bid1 price (for sales):

• Buy Orders: Limit Price = Ask1 + {amount}
• Sell Orders: Limit Price = Bid1 − {amount}

Consider this practical example: If you’re trading ETH/USDT with Ask1 at 2,100 USDT and Bid1 at 2,000 USDT, and you set a 0.1 USDT tolerance, your buy order’s limit price becomes 2,100.1 USDT while your sell order’s limit price becomes 1,999.9 USDT.

This means your buy order fills only if the market price is 2,100.1 USDT or lower, and your sell order fills only if the market price is 1,999.9 USDT or higher. Any portion beyond this range gets canceled.

Setting by Percentage

Percentage-based tolerance scales with the market price, offering flexible protection across different price levels:

• Buy Orders: Limit Price = Ask1 × (1 + {percentage}%)
• Sell Orders: Limit Price = Bid1 × (1 − {percentage}%)

Using the same ETH/USDT example, a 0.5% tolerance produces a buy limit price of 2,110.5 USDT [2,100 × (1 + 0.5%)] and a sell limit price of 1,990 USDT [2,000 × (1 − 0.5%)]. Your orders only execute within these boundaries.

Special note for major pairs: BTC and ETH trades only support amount-based slippage tolerance, not percentage-based configuration. For other trading pairs, you can choose whichever method suits your strategy better.

Step-by-Step: Placing Orders with Slippage Protection

Step 1 - Prepare your order: Navigate to the trading page and select your desired trading pair. On the right panel, specify your trading direction, select Market as your order type, and enter your order value or quantity as you normally would.

Step 2 - Activate slippage tolerance: Check the slippage tolerance checkbox. Click the dropdown menu to toggle between By Amount and By Percentage configurations. Once you set your preference, the interface displays the market depth snapshot and indicates whether your order is expected to execute completely.

Step 3 - Execute: Click Buy or Sell, review all details in the confirmation popup, then click Buy or Sell again to complete your trade.

You’ve now successfully placed a market order protected by slippage tolerance settings.

Monitoring Your Slippage Tolerance Settings

To review orders placed with slippage tolerance protection, access the Order History section at the bottom of the trading page and hover over any order to view its tolerance parameters. Alternatively, select Orders from the top-right navigation menu to view comprehensive order history with the same hover functionality.

Important Considerations

Note that slippage tolerance is disabled by default, but the system remembers your preferences for your next trading session. The feature currently doesn’t support OCO orders, Conditional orders, or Trailing Stop orders.

For futures traders, you can also apply slippage tolerance to Market Close orders, setting either a percentage or amount threshold just as you would when opening positions.

Execution guarantee: Full order execution isn’t guaranteed since actual fills depend on order size and available market depth. If market liquidity is insufficient to fill your entire order within your slippage tolerance range, only the portion within your tolerance executes while the remainder gets canceled. This partial fill behavior protects you from accepting prices outside your defined parameters.