The explicit costs in a trade are readily discernable and include commissions, taxes, stamp duties, and fees. Implicit costs sometimes cannot be measured as easily but do exist. They include the bid-ask spread, market or price impact costs, opportunity costs, and delay costs (a.k.a. slippage costs).

When an order is not filled, delay or slippage costs result. These costs can be substantial if information regarding the security is released while the order sits unfilled.

Implicit costs are usually measured using some benchmark, such as the volume-weighted average price (VWAP). VWAP is a weighted average of security prices during a day, where the weight applied is the proportion of the days trading volume. If the VWAP during a day was $21 and 100 shares were bought at $20.40, then the estimate of the implicit cost would be 100 × ($20.40-$21.00) = -$60. The explicit costs in a trade are the commissions, taxes, stamp duties, and fees.