What is slippage in stock trading?

Slippage is the gap between the price you expected when placing an order and the price you actually got filled at. It happens because the market moves in the time between when you click submit and when the exchange matches your order, and because there may not be enough buy or sell quantity available exactly at the price you saw. Market orders are more exposed to slippage since they’re designed to execute immediately at whatever price is available, while limit orders eliminate negative slippage entirely (though they add the risk of not executing at all). Slippage tends to be worse in small-cap or thinly traded stocks, during the first and last few minutes of the trading session, and around high-impact news or results announcements. Before placing a large market order in a less liquid stock, you check the market depth (the five best bid and ask levels) to estimate how much slippage you might face.