// GLOSSARY

Slippage

The difference between the price you expected and the price you actually got — from crossing the spread, walking book levels, or the market moving mid-execution. In thin prediction markets it's routinely the largest trading cost.

Slippage is the catch-all name for execution shortfall: you modeled a trade at one price and booked it at a worse one. It has three main components — the spread you cross, the price impact of your own size, and market drift between decision and fill.

Worked example

Your signal fires with the mid at 42¢ (arrival price). The ask is 43¢; your size walks it to 45¢; average fill 44¢, plus ~1.7¢ Kalshi taker fee. Modeled entry 42¢, actual all-in ~45.7¢ — 3.7¢ of slippage on a contract that pays at most $1. A strategy with a 3¢ modeled edge just became a losing strategy.

Why prediction markets are extreme

Books are thin, spreads are wide relative to price, and contracts are capped at $1 — so slippage measured in cents is enormous measured in edge. Measuring it per fill (the job of an execution receipt) and capping it per order (a slippage bound) are the two disciplines that keep it survivable. Full treatment: slippage in thin prediction markets.