Slippage

Slippage is the gap between the price you intended to trade at and the price you actually got. Aim to buy at $50 and fill at $50.10, and the ten cents is slippage. It is never billed separately; it hides inside the execution price.

It happens because quotes move between the moment you send an order and the moment it fills. A market order in particular says take the current price and execute now, so a buy sweeps the cheapest offers upward in sequence. If your order is large, it eats into higher offers and your average fill price drifts up.

So slippage grows in thinly traded names, right after the open and before the close, and during sharp moves. Low volume means a wide spread between quotes, so moving even one level up costs meaningfully. You feel it far more in small caps and low-volume ETFs than in large, heavily traded stocks.

You can limit it. A limit order will not fill worse than the price you set, though it may not fill at all. More fundamentally, trading less often is the surest remedy: even 0.1% per trade, taken dozens of times a year and stacked on commissions, quietly erodes returns.