How do exchanges minimize slippage for large trades?
Exchanges minimize slippage by maintaining deep liquidity pools, encouraging market maker participation, and using algorithmic order matching. Circuit breakers or price limits may temporarily halt trading during extreme volatility to prevent abrupt market impacts. Traders can also place limit orders to control execution prices. High liquidity ensures that sizable trades do not drastically affect market prices, preserving fairness and stability. Combined with real-time monitoring and automated systems, exchanges can execute large trades efficiently while reducing slippage and protecting traders’ capital.
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