Is market order slippage risk still practical? In the case of stock trading liquidity appears to be abundant for most stocks.
By definition all of the former are contained in the latter category. But not vice versa, with the set difference being “marketable limit orders”. That is orders with instructions to not trade beyond a set price, but where that price is set wide enough that we expect the order to cross the market and fill at arrival.
I think what you’re saying is why use a pure market order instead of a marketable limit. And there I mostly agree with you. There’s not much argument besides convenience of not having to fill in the limit price.
But in terms of market impact, marketable limits are no different than market orders. In fact to everyone else, they look identical in the data feed.
Then I read a book by Fischer called "Common Stocks, Uncommon Profits"which suggested that when you have a long investment horizon, say 5-10 years, and you have done the research to have the confidence, a limit order gives you no real benefit.
Say a stock is $100 today. In 5-7 years you expect it to be $500, the benefits of doing a limit order are less significant.
>the “benefits” of waiting increase roughly in line with the risks of not getting a fill. That seems to indicate the market is especially efficient at pricing liquidity.
[1] see: "chart 4" https://www.nasdaq.com/articles/an-interns-guide-to-trading-...
In crypto markets the difference between maker and taker fees can sometimes make it worth waiting, but you need to keep in mind that every minute you spend not having made the trade, is price risk that you are exposed to. And saving 5bps on fees might lead to you losing 50bps in price movement.
For even medium sized institutional funds? Absolutely. Think of it this way. If market impact didn’t exist for anybody, then we’d expect prices to never move.