> For the complete documentation index, see [llms.txt](https://docs.usdfi.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usdfi.com/usdfi-amm/understanding-automated-market-makers/how-to-execute-a-token-swap/price-impact.md). # Price Impact The change in the token's value resulting from a trade in a pool is referred to as **Price Impact**. This is calculated as the discrepancy between the current market value and the effect that the trade has on the overall liquidity within a pool. The degree of Price Impact experienced is contingent on the volume of the liquidity pool. When there is *high liquidity* in the pool, the effect of your trade on the token's price may be minimal. In contrast, when *liquidity is low*, the impact of your trade on the token's price may be more significant. Consequently, a larger price impact may result in a less favorable overall price for the trade. It's important to keep in mind that the rate of price impact is *continually fluctuating* as the total value of the liquidity pool shifts based on the supply and demand of each token. In the event of an anticipated high Price Impact, USDFI will issue a warning as the swap may result in a significant loss. The decision to proceed with the transaction despite the warning is at the user's own risk. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.usdfi.com/usdfi-amm/understanding-automated-market-makers/how-to-execute-a-token-swap/price-impact.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.