Bid-Ask Spread and Slippage Explained

Bid-ask spread is the difference between the lowest price asked for an asset and the highest price bid. Liquid assets like Bitcoin have a smaller spread than assets with less liquidity and trading volume. Slippage occurs when a trade settles for an average price that is different than what was initially requested. It often happens when executing market orders. If there's not enough liquidity to complete your order or the market is volatile, the final order price may change. To combat slippage with low-liquidity assets, you can try to split your order into smaller parts.