Start with the setting. Are we inside or outside. For inside, use "INT". For outside, use "EXT."
Keeping everything capitalized, next comes the exact location. If we are in a supermarket, write "INT. SUPERMARKET."
If the scene takes place in specific sections of a location, be sure to specify what area. The dairy aisle of the supermarket would be: "INT. DAIRY AISLE, SUPERMARKET."
The last part of a slug line comes in the form of day or night, later or continuous.
Day or Night refers to the time in the scene. They should only be used when referring to new scenes. For instance, if we are in a bedroom at night, and the next scene is in an office building during the day, the slug lines should read:
INT. BEDROOM --- NIGHT
INT. OFFICE --- DAY
If the series of scenes follows each other in the same location, we use "CONTINUOUS" so we know it is the same sequence and not an entirely new location. An example of someone waking up and walking to a car would be:
INT. BEDROOM, HOUSE --- DAY
INT. BATHROOM, HOUSE --- CONTINUOUS
INT. LIVING ROOM, HOUSE --- CONTINUOUS
EXT. HOUSE --- CONTINUOUS
INT. CAR --- CONTINUOUS
Whatever the next scene is, it would get a DAY or NIGHT.
Lastly, we use "LATER" when describing scenes in the same location but with passages of time. An example would be when someone wakes up from a dream, or after a monntage. This tells the AD or Line Producer that the original scene and this new scene with "LATER" can be shot on the same day.