What key factor can cause wide discrepancies in expected versus executed prices?

Market volatility is a key factor that can lead to significant discrepancies between expected and executed prices. When market volatility is high, the prices of assets can fluctuate rapidly and dramatically. This means that the price at which an order is expected to be filled may not align with the price at which it is actually executed.

For instance, if a trader places an order to buy an asset at a specific price, the market may change before the order is processed. If the asset's price rises sharply in response to new information or events, the executed price could be considerably higher than anticipated. Conversely, if the price falls sharply, the trade might be executed at a considerably lower price.

High trading volume, while it can influence price execution, generally helps narrow the spread between expected and actual prices due to better liquidity. Similarly, investor sentiment may affect market trends and price movements but does not specifically account for immediate discrepancies in execution price. The number of active traders can impact market dynamics but does not directly correlate with the volatility and resultant execution price changes.