// GLOSSARY

Slippage bound

A server-enforced cap on how far from the reference price an order may fill — effectively an automatic price limit on everything a strategy or agent sends. Converts "the bot went haywire" from an unbounded loss into a bounded one.

A slippage bound is a standing rule: no order may execute more than X (cents or percent) beyond the reference price at submission time. It's a limit order discipline imposed by infrastructure rather than left to each strategy's good behavior.

Worked example

You set a 2¢ bound. Your agent, misreading a thin book, tries to market-buy 1,000 contracts where the touch is 44¢ but depth runs out at 50¢. The bound converts the order to fill only within 46¢: it takes what's available there and leaves the rest, instead of sweeping to 50¢. Worst case went from "whatever the book held" to a number you chose calmly in advance.

Why enforce it server-side

Strategies under stress are exactly the code paths least likely to respect their own limits, and an AI agent may not reliably apply a limit it was only told about. A bound enforced in the API layer — as Mithril does, alongside notional caps — applies to every order regardless of origin. Design details in risk limits for AI trading agents.