It was 9:15 AM.
The market had just opened.
Arjun sat unusually still at his desk, staring at one number on his screen.
₹500.00
His coffee sat beside him, untouched.
Across the desk, Meera glanced at him.
“You’ve been watching that stock since before the market opened.”
Arjun smiled.
“Today’s the day.”
“For what?”
“This thing is going to move.”
Almost on cue, the price flickered.
₹500.00.
₹500.20.
₹500.00.
Arjun leaned closer to the screen.
“If I wait, I’ll miss it.”
Meera looked back at her monitor.
“Then don’t let the screen make the decision for you.”
But Arjun had already made up his mind.
Click.
Market Buy Order placed.
He leaned back.
Done.
Then the confirmation appeared.
Order Executed: ₹501.40
Arjun sat up again.
“Wait.”
He checked the screen.
Then the order.
Then the screen again.
“₹501.40?”
Meera looked across.
“What happened?”
“It was ₹500 when I clicked Buy.”
“And?”
“I got it at ₹501.40.”
He turned his monitor towards her.
“Did something go wrong?”
Meera looked at the order for a moment.
“No.”
Arjun frowned.
“How can nothing be wrong? I saw ₹500.”
Meera picked up her coffee.
“You saw ₹500.”
She paused.
“That doesn’t mean ₹500 was going to wait for you.”
Arjun looked confused.
Meera thought for a second.
“Remember when we tried booking those concert tickets last month?”
Arjun laughed.
“The ones that disappeared in about thirty seconds?”
“Exactly.”
She continued.
“You saw two tickets available. You clicked. But before your request went through, somebody else had already taken them.”
“So we had to choose the next available seats.”
“Right.”
She pointed at his trading screen.
“Something similar just happened here.”
Arjun looked again at the price.
“When you saw ₹500, shares were available around that price. But the market was moving quickly. Other orders reached the exchange. Those shares were taken.”
“And by the time my order reached?”
“The next available seller was at ₹501.40.”
Arjun leaned back.
For the first time since the market opened, he picked up his coffee.
“So the price didn’t change after I bought.”
“It was changing while I was buying.”
Meera smiled.
“Now you’re getting it.”
She wrote one word on a sticky note and pushed it across the desk.
SLIPPAGE
“The difference between the price you expect and the price at which your order actually gets executed.”
Arjun looked at the word.
“So this can happen anytime?”
“It can happen when prices are moving quickly. It can also become more noticeable when liquidity is lower, when larger orders enter the market, or when news suddenly brings a rush of buyers or sellers.”
Arjun looked at his order again.
“Could I have controlled the price?”
“You can control the maximum price you’re willing to pay with a limit order,” Meera said. “But then you’re controlling the price, not guaranteeing the trade.”
“What do you mean?”
“If nobody is willing to sell at your limit price, your order may simply wait.”
Arjun nodded slowly.
Market order: greater focus on getting the order executed at the available market price.
Limit order: greater control over the execution price, but execution isn’t guaranteed.
Suddenly, another stock on his watchlist began moving.
₹742.
₹744.
₹747.
His hand instinctively moved towards the mouse.
Meera noticed.
She didn’t say anything.
₹749.
Arjun watched the screen for another second.
Then he stopped.
He looked at the available prices.
Thought about what price he was comfortable with.
And placed his order accordingly.
Then he went back to his coffee.
Meera smiled.
This time, she didn’t need to explain anything.
