A clean quantitative framing is this: slippage is not random bad luck; it is a measurable cost with identifiable drivers. Mechanism: Slippage comes from order size relative to available liquidity, timing, venue choice and information leakage. Each driver can be managed. $$ Implementation\ Shortfall = Decision\ Price - Execution\ Price $$ Plain English: Implementation shortfall measures the gap between the price you decided to trade at and the price you actually got. Why it matters: That matters because slippage that looks small on one trade compounds into a significant return drag over hundreds of executions. Market translation: A market order on a mid-cap stock during low-volume hours can cost 15-30 bps more than a patient limit order during the liquidity window. Failure mode: The mistake is accepting slippage as the cost of doing business without analyzing which part is preventable. Review question: Write down the state variable you would monitor first if this thesis started to drift. A lot of confusion disappears once you separate the headline from the mechanism.