Use the calculator below to estimate price impact (slippage) for equities, constant‑product AMMs (crypto), or a simplified multi‑level order book. Choose a tab and enter the relevant inputs to estimate percent impact, expected execution price, and (where applicable) estimated impact cost.
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Price Impact Formula
The following formula can be used to calculate the Price Impact (slippage) as a percentage relative to a reference price:
PI(\%) = \left|\frac{P_{\text{exec}}-P_{\text{ref}}}{P_{\text{ref}}}\right| \times 100Variables:
- PI is the price impact (slippage) (%)
- Pexec is the average execution (fill) price of the order ($ per share)
- Pref is the reference price used as a benchmark (often the mid price, last traded price, or AMM spot price before the trade) ($ per share)
To calculate price impact, find the difference between the average execution price and the reference price, divide by the reference price, and convert to a percentage. The absolute value is commonly used to express impact as a positive “cost” regardless of whether the trade is a buy or a sell (buys tend to execute above the reference price; sells tend to execute below it).
What is a Price Impact?
Price impact refers to the effect that large trades or high trading volumes have on the price of a security. When a large number of shares are bought or sold, it can significantly move the price up or down. This is because the increased demand or supply can outweigh the current available supply or demand. Price impact is a crucial consideration for large investors and traders as their trades can influence the market price, potentially leading to less favorable execution prices.
How to Calculate Price Impact?
The following steps outline how to calculate the Price Impact.
- Determine the reference price (Pref) before the trade (for example, the mid price or AMM spot price).
- Determine the average execution price (Pexec) of your trade (the average price you actually paid/received across fills).
- Compute the relative difference: (Pexec − Pref) ÷ Pref.
- Take the absolute value if you want the impact as a positive cost.
- Multiply by 100 to convert to a percentage.
Example Problem:
Use the following variables as an example problem to test your knowledge.
Reference price (Pref) = $10.00
Average execution price (Pexec) = $10.05
Trade side = Buy (so execution is typically above the reference price)
Price impact = |(10.05 − 10.00) / 10.00| × 100 = 0.5%
