Slippage
The difference between the expected fill price and the actual fill price. Positive slippage benefits you; negative slippage costs you.
Slippage is the gap between the price you intended to trade at and the price you actually received. It is an unavoidable cost in real-world execution, particularly for market orders and during fast or illiquid markets.
Slippage has two sources: bid-ask spread (the structural cost of immediately crossing the spread) and market impact (your own order moving prices as it consumes available liquidity).
Positive slippage occurs when your fill is better than expected — a buy that fills below the ask. Negative slippage is the more common case: a buy that fills above the current ask because liquidity at that level was consumed before your order arrived.
On the desk
You send a market buy expecting to fill at $50.00. By the time your order reaches the exchange, sellers at $50.00 are gone and you fill at $50.07. Slippage = $0.07 per share.