extra Flashcards
1
Q
what costs are a critical ingredient to any investment strategy?
A
trading costs
2
Q
what are examples of explicit costs?
A
Brokerage comissions
cost of using trading platforms, CCPs and CSDs (central securities depositories)
3
Q
what are brokerage comissions
A
usually a fixed % of the capital amount of the transation or a fixed amount per trade
4
Q
what are examples or implicit costs
A
- bid-ask spreads
- price impact of a large trade
- opportunity costs
- taxes and other charges
5
Q
what is price impact
A
large orders can create immediate detrimental impacts on trades
6
Q
what is opportunity costs?
A
the cost of waiting - if prices rise when spreading a large order over time to avoid the price impact
7
Q
what is SDRT?
A
0.5 of purchase amount
8
Q
what is the PTM levy
A
£1 on purchases/ sales in excess of £10,000 on LSE.
