Headroom
Definition
The difference between the current operating level of a signal and the maximum level the system can handle before clipping. Adequate headroom ensures transients and unexpected peaks do not cause distortion.
In Simple Terms
The space between your current volume and the maximum before distortion. Like leaving room in a suitcase for last-minute items. In mixing, leave enough headroom so mastering has room to work.
In Practice
Leaving 6 dB of headroom on the mix bus before limiting gives the mastering engineer flexibility to apply processing without immediately hitting the digital ceiling.