Round Trip Transaction Costs

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Round Trip Transaction Costs

All commissions and other expenses related to trading a security. When an investor buys or sells a security, he/she must usually pay a fee to his/her investment adviser, who may or may not also be the broker, who is also entitled to a fee. Research and other indirect costs informing investment decisions are not usually considered transaction costs unless they directly relate to or result from a specific transaction. The investor accounts for these expenses when calculating whether an investment made a profit or loss. See also: All in Cost.
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References in periodicals archive ?
Round-trip transaction costs for individuals are in excess of 2 percent and often reach 5 percent.
Round-trip transaction costs are around 10.9 per cent to 12.3 per cent.
We extended our study by taking the round-trip transaction costs into consideration.
If securities dealers expect that the ex-dividend capital loss will be less than the dividend, then they may buy the stock cum-dividend and sell it ex-dividend, provided that expected trading profits exceed round-trip transaction costs. (We refer to this strategy as "long-position dividend capture.") We should observe abnormal buy volume in the Dealers account type prior to an ex-date and abnormal sell-volume on or after the ex-date.
Our proxy for round-trip transaction costs is bid-ask spread.(11) The TORQ quotes file provides data on bid-and-ask quotes.