transaction-costs
3 free lessons tagged transaction-costs across Business. Each one is a short sequence of focused steps with narration and a five-question quiz at the end — take them in any order, no signup required.
Measuring Execution Honestly
Execution costs are small numbers buried in large noise, so distinguishing a good desk from a lucky one takes more data than most institutions have. This lesson covers what transaction cost analysis can establish, the reversion test that detects information leakage, and what happens to any measure once people are paid on it.
The Schedule Problem: Impact Against Timing Risk
Trading fast costs impact. Trading slowly exposes the order to drift. Neither can be minimised without worsening the other, so the schedule is an optimisation with a parameter that encodes urgency. This lesson builds that trade-off, derives the shape of the resulting trajectory, and identifies what the model cannot see.
Implementation Shortfall: What an Order Really Costs
The cost of a trade is not the commission, and it is not the spread. It is the gap between the return the decision would have produced on paper and the return the account actually got. This lesson builds that measure, decomposes it into four sources, and shows why the largest component is often the trade nobody made.