Order size, venue fees, spread, slippage, price impact, and total execution cost.
By the end, you should be able to
- Separate quoted price from effective execution.
- Estimate major components of total cost.
- Explain why order size changes outcomes.
Headline price versus effective price
Illustrative costs show why the cheapest quote may not be the cheapest execution.
Four costs, four questions
Fees are explicit venue or network charges. Spread is the gap between best bid and ask. Slippage is the difference between expected and actual execution. Price impact is the movement caused by consuming available liquidity.
Size is part of the price
A quote without order size is incomplete. Larger orders can consume several order-book levels or move an AMM pool along its pricing curve.
Compare effective outcomes
Estimate received value after fees and realistic depth. A venue with a better headline price may deliver a worse result after spread, withdrawal costs, gas, or transfer risk.
What this does not tell you
- An estimate cannot capture latency or book changes before execution.
- DEX quotes can change between simulation and block inclusion.
- Transfers add time, operational risk, and possible withdrawal fees.
Estimate an effective execution
Use public data only; do not place a trade.
- Choose a hypothetical order size.
- Inspect several order-book levels in Bid / Ask Analysis.
- Add visible spread and a hypothetical fee, then record assumptions and missing costs.
Check your understanding
1. Why must order size accompany a quote?
2. What is spread?
3. What is an effective-price comparison?