Slippage: settlement, reports and thin months

Spread, financing and roll are prices you can look up. Slippage is the cost that depends on when and how you ask - and commodities, more than any market you have met so far, tell you in advance when asking will be expensive.

The scheduled bad moments

• Report seconds. Module 2 showed depth being withdrawn before EIA and WASDE releases. A market order in that window crosses a hollowed-out book, and the fill reads like a different market because it briefly is one.
• The settlement window. Deep, but violently busy: fine for size, hostile to precision, as the day's benchmark gets fought over.
• Thin months and thin hours. A stop in a back month, or triggered at 3am, executes against whoever happens to be there - which module 2's volume-by-hour chart showed is close to nobody.

Stops convert thinness into cost

A resting stop becomes a market order at the worst available moment - that is what triggering means. The gap-risk arithmetic you met in FX applies with commodity volatility behind it: the stop's price is a request, and the book decides what honouring it costs. Slippage budgets belong in the plan for any position held through a report or across thin sessions, at double whatever a calm-hours estimate suggests.

What you can actually do

Slippage cannot be negotiated, but it can be scheduled around: enter and exit in the liquid hours, stand flat through releases the plan has no view on, and prefer the front month's depth unless the trade specifically needs another. Measure your own fills against intended prices for a month - the average is your personal slippage rate, and it belongs in the next lesson's assembly alongside every published cost.