Polymarket Slippage: How to Control It in Trading Bots
Slippage can quietly destroy a profitable Polymarket trading strategy. Your signal may correctly identify a YES token as undervalued, but that does not mean you can actually buy the required position at the price used by your model. If the order book has limited liquidity, a large order may consume multiple ask levels. The deeper your order walks through the book, the worse your average execution…
Polymarket slippage is a sneaky factor that can erode profits for automated trading strategies. Even if your model correctly flags a token as undervalued, you cannot guarantee execution at the expected price. This happens because the Polymarket CLOB order book may not have sufficient liquidity to fill the entire order at the anticipated price.
As orders walk deeper into the book, the average execution price rises due to higher ask prices. To manage this, you must factor slippage into the trading decision from the start, not as a post-trade analysis. Key elements to estimating slippage include understanding the order book depth and price impact, setting a maximum slippage budget, optimizing order sizing, and continuously monitoring the gap between expected and actual fills.
By anticipating and controlling slippage, your Polymarket trading bot can operate closer to its projected profitability.
Written by urgent.news from Dev.to's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
