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Opportunity cost

The profit foregone on the part of an order that never filled, which is the hidden other half of transaction cost analysis.

Every step taken to reduce visible cost — resting instead of taking, slicing over hours, setting a tight limit — raises the chance of not trading at all. The unfilled remainder is invisible in a fill report and can easily be the largest cost of the order.

Any honest cost framework, implementation-shortfall included, charges the unfilled quantity at the price move you missed.

Example: you want 50,000 shares at 25.00 and fill 18,000 at an excellent average of 24.99. The stock closes at 26.40. The 32,000 unfilled shares represent $44,800 of foregone gain, against the $180 you saved by being patient on the part you did get.

Related: implementation-shortfall, fill-rate, arrival-price, execution-quality

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