// GLOSSARY

Price impact

How much your own order moves the price — consuming book depth pushes your later fills to worse levels and often shifts the quote after you trade. In thin prediction markets, impact from even modest size can exceed the spread itself.

Price impact is the market moving because you traded. Every contract you take removes depth; once a level is empty, your next fill is at the next level, and the book you leave behind quotes wider or higher than the one you found.

Worked example

A book offers 300 at 44¢, 400 at 46¢, 500 at 49¢. Your 700-contract buy clears the first two levels: average fill ~45.1¢, and the new best ask is 49¢ — you paid 1.1¢ of impact on average and moved the visible market 5¢. Anyone (including your own next order) now trades against the damage.

Impact vs slippage

Slippage is the general gap between expected and achieved price; impact is the component you caused, as opposed to the market drifting on its own. In deep markets impact is a rounding error; in prediction markets it's often the dominant cost, which is why size gets sliced and worked over time rather than swept. The measurement details are in slippage in thin prediction markets.