Abstract
How much does it cost to buy and sell assets on the market? Such a cost is called transaction cost.
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- 1.
Sometimes it is not even enough, because when using margin one has to include in the count also the interests that the broker charges.
- 2.
See the Bid–Ask spreadsheet.
- 3.
As a matter of fact, the actual loss in euros will be computed at the end of the day.
- 4.
Contract for difference: a certificate representing an underlying and that usually has a transaction cost that reduces just to the bid–ask spread.
- 5.
In our case, since we have supposed to be long both on the EUR/USD and on the Dax, in both cases we may decide to sell and collect the profits or stop the losses.
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© 2012 Springer-Verlag Italia
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Di Lorenzo, R. (2012). Transaction Costs. In: How to Make Money by Fast Trading. Perspectives in Business Culture. Springer, Milano. https://doi.org/10.1007/978-88-470-2534-9_2
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DOI: https://doi.org/10.1007/978-88-470-2534-9_2
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Publisher Name: Springer, Milano
Print ISBN: 978-88-470-2533-2
Online ISBN: 978-88-470-2534-9
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