Explain what makes up the cost of executing a trade, both visible and hidden

Explicit costs are those that appear on the trade record: commissions, exchange and clearing fees, and transaction taxes. Implicit costs do not appear on any invoice but often outweigh explicit costs: the bid-ask spread paid to cross the market, the market impact of the order moving prices, delay costs from waiting to trade while prices move, and opportunity costs from failing to complete the order. Large or urgent orders in illiquid securities tend to have high implicit costs, and there is a trade-off: trading quickly raises market impact, whereas trading slowly raises delay and opportunity cost. A common trap is judging a broker only by commission; a cheap broker with poor execution is expensive.