Key takeaways
- The spread is the gap between the best bid and the best ask. A market order crosses it at once, so it is a cost you pay on entry and again on exit.
- Slippage is the gap between the price you expected and the average price you got. It rises with order size, thin order books and fast markets.
- Neither is a fee. Backpack's published maker and taker rates exclude both, so the real cost of a trade is higher than the fee line alone.
- A limit order caps the price you pay but may not fill. A market order fills at once at whatever the book offers.
- In the invented illustration below, buying 10,000 USD of a token and selling it straight back costs 52.01 USD with no price move, of which 20.01 USD is fees.
For information only. Not investment advice. This guide explains how trading costs arise and does not tell you whether, when or what to trade. Read the risk disclosure first.
The bid-ask spread: the price of trading at once
An exchange keeps an order book: a list of the prices at which people have offered to buy (bids) and to sell (asks). The bid-ask spread is the lowest ask minus the highest bid. If the best bid is 99.90 and the best ask is 100.10, the spread is 0.20, or 0.20% of the mid-price of 100.00. Nobody charges you this amount. You pay it because to buy straight away you accept the seller's higher price, and to sell straight away you accept the buyer's lower one. The guide to how a crypto exchange works explains order books in more detail.
A narrow spread usually means many people are quoting prices close together. A wide spread means few are, or that those who do are wary of a fast move. Heavily traded pairs tend to have narrower spreads than rarely traded tokens, and spreads tend to widen in quiet hours and in sharp moves. Crypto markets do not close, so there is no fixed quiet period. The exact spread on any market at any moment can only be read from the live order book.
Slippage: the gap between expected and actual price
Slippage is the difference between the price you expected when you sent an order and the average price at which it filled. It has two common causes. The first is size: an order larger than the quantity offered at the best price uses up that level and continues to the next, then the next, each worse than the last. The second is time: in a fast market the book can change between the moment you see a price and the moment your order reaches it.
Slippage works against you in both directions. A buy fills higher than expected, and a sell fills lower. Occasionally an order fills at a better price than expected, which some traders call positive slippage, but you cannot plan on it.
A worked example from the order book
The numbers below are invented to show the arithmetic. They are not a quote for any Backpack market. The only published figure is the Backpack spot tier 1 taker fee of 0.10%, as shown on the fee schedule.
Illustration only, not a forecast
A fictional token has a best bid of 99.90, and the sell side of its order book shows the offers in the table. A trader sends a market order to buy 100 units, worth about 10,000 USD.
| Price level | Ask price | Units taken | Cost |
|---|---|---|---|
| Best ask | 100.10 | 40 | 4,004.00 |
| Second level | 100.20 | 30 | 3,006.00 |
| Third level | 100.40 | 30 | 3,012.00 |
| Total | 100.22 average | 100 | 10,022.00 |
The trader expected to pay about 100.10, the best ask on the screen. The order filled at an average of 100.22, so slippage against the best ask is 0.12 per unit, or 12.00 USD on 100 units. Measured against the mid-price of 100.00, the order cost 22.00 USD more than the mid-price value, which is 0.22%. The taker fee is 0.10% of 10,022.00 USD, which is 10.02 USD.
Now suppose the trader changes their mind and sells the 100 units straight back at the best bid of 99.90, assuming for simplicity that the book has not moved. The proceeds are 9,990.00 USD less a taker fee of 9.99 USD.
| Step | What happens | Amount |
|---|---|---|
| 1. Buy | 100 units at an average of 100.22 | -10,022.00 |
| 2. Buy fee | 0.10% taker fee on 10,022.00 | -10.02 |
| 3. Sell | 100 units at 99.90 | +9,990.00 |
| 4. Sell fee | 0.10% taker fee on 9,990.00 | -9.99 |
| Net result | No price move at all | -52.01 |
The trader is down 52.01 USD with no change in the market. Of that, 20.01 USD is fees. The other 32.00 USD is the spread and slippage: 22.00 USD paid above the mid-price on the way in and 10.00 USD given up below it on the way out. The fees appear in the fee schedule. The 32.00 USD appears nowhere until you read the book.
With no price move at all, the round trip cost 52.01 USD. Only 20.01 USD of it was a fee.
Market orders and limit orders
The order type decides which cost you accept. A market order fills at once at the prices available, so it is certain to fill but not certain of its price. A limit order names the worst price you will accept. It cannot fill worse than that price, but it may fill only in part, or not at all, if the market never reaches it.
A limit order priced away from the market rests on the book, and when someone else fills it you are charged the lower maker fee. A limit order priced to cross the spread fills at once as a taker. In the example above, a resting buy order for 100 units at 99.90 would carry a maker fee of 0.08%, which is 7.99 USD on 9,990.00 USD, and would pay no spread and no slippage. It would also fill only if sellers came down to that price. Choosing between the two is a trade-off between price and certainty, and neither is right for every situation. The glossary entries for maker and taker fees define the terms.
Six ways to limit the cost
- Read the book before you trade. Check the best bid and ask, and the quantity offered at each level on the side you will trade against.
- Compare the order size with the depth. If your order is larger than the first one or two levels, expect slippage.
- Use a limit order when the price matters more than speed. Set the price you accept, and accept that it may not fill.
- Split a large order. Smaller orders over time use fewer levels at once, though the market may move between them and each order is charged a fee.
- Be careful in fast or illiquid conditions. Spreads widen and books thin out around sharp moves, and a market order then costs more.
- Count every cost. Add fees, spread and slippage, on entry and on exit, before judging whether a trade is worth making.
Spread, slippage and fees on Backpack
Backpack publishes maker and taker fees as a percentage of trade value. At tier 1, the entry tier, spot fees are 0.08% for makers and 0.10% for takers, as set out on the fee schedule, which cites Backpack's trading fees support article and notes that the rates are subject to change. The fee schedule's own worked examples leave out spreads, funding payments and network fees. Spread and slippage on a Backpack market come from its live order book, and this guide gives no figure for either because none can be sourced in advance.
Availability matters for a UAE reader. Backpack's Dubai licence is held by Trek Labs Ltd FZE and covers spot trading only. Perpetual futures are not available in the UAE, and stock brokerage is not provided under the CySEC, MiCA or VARA licences. Costs on derivatives are covered in the perpetual futures guide and the comparison in spot vs derivatives trading, but those products are not offered to UAE clients. The legal entities behind each product are set out on the About page, and the FAQ answers common questions on availability. If you are weighing a sale of crypto for dirhams, the guide to cashing out crypto to AED compares the routes, including their costs.
See the fees before you trade
The fee schedule lists the maker and taker rate at every tier for spot and perpetual futures, with worked examples and the date it was last reviewed.
Frequently asked questions
What is the difference between slippage and the spread?
The spread is a gap that exists on the order book before you trade: the best bid against the best ask. Slippage is what happens to your order when it fills: the average price you receive compared with the price you expected. A small order pays roughly the spread. A large order pays the spread plus slippage from using up several price levels.
Does a limit order avoid slippage?
A limit order cannot fill at a price worse than the one you set, so it avoids slippage in the sense of an unexpected worse price. The cost is certainty: it may fill only in part, or not at all, if the market does not reach your price. A limit order that crosses the spread fills at once and is charged as a taker.
Why is the spread wider on some markets than others?
The spread reflects how many people are willing to quote prices close together. A market with few resting orders, a less traded token or a quiet hour usually has a wider spread than a heavily traded pair. Fast price moves also widen it, because those who quote prices ask for more room against being caught out.
Is slippage included in Backpack's trading fees?
No. The fee schedule lists maker and taker fees as a percentage of the trade value. Spread and slippage come from the order book at the moment you trade, so they are not in any fee table and cannot be known in advance. The fee schedule on this site leaves spreads out of its worked examples for that reason.
How can I estimate slippage before I place an order?
Read the depth of the order book on the side you will trade against. Add up the quantity at each price level, from the best price outward, until the total reaches your order size. The average of those prices, weighted by quantity, is the price a market order would achieve if the book did not change before it fills.
Do slippage and spread work the same way on spot and perpetual futures?
The mechanics are the same on any order book. What differs is the market. Under Backpack's Dubai licence, perpetual futures are not available in the UAE, so for a UAE client the relevant markets are spot. The perpetual futures guide explains the derivative itself.
Sources
- Backpack, Trading Fees, support site. Tier 1 spot figures (0.08% maker, 0.10% taker) as shown on the fee schedule, read for this guide on 19 October 2026; the support article itself was not re-read.
- Backpack, VARA License Information, support site. Cited as quoted in What are perpetual futures, which read it on 12 October 2026; not re-read for this guide.
- Virtual Assets Regulatory Authority, public register. Linked so you can check the licence yourself; not read for this guide.
The order-book figures in this guide are invented for the arithmetic and are not taken from any source or market. No external definition of spread or slippage was fetched for this guide: the definitions here are the research team's own plain-language explanations.