Trading Costs Calculator
Estimate how spreads, slippage, commissions and financing reduce a trade’s illustrative gross profit or increase losses.
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How this tool works
Estimate how spreads, slippage, commissions and financing reduce a trade’s illustrative gross profit or increase losses. Inputs should represent your own assumptions, current instrument specifications and account denomination; no automatic market-data feed is used unless the page explicitly states otherwise.
Total estimated costs = quantity × (spread + entry slippage + exit slippage) × point value + opening and closing commissions + financing.
Worked example
For 10 units, 1 point spread, 0.5 points slippage per side and £1 point value, execution costs total £20 before commissions and financing.
What to check before relying on a result
Check the direction of the trade, units and currency, market contract specifications, realistic spreads and slippage, execution conditions, any applicable taxes and fees, and whether the assumed model fits your instrument. A calculator does not eliminate market risk.
Frequently asked questions
Is the spread counted twice?
The model counts one full bid–ask spread for the complete round trip, not one full spread at each side.
Are overnight costs included?
Yes, enter your estimated total holding or financing cost as a separate input.
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Total transaction costs are not just the advertised commission. For the tool's simplified round trip, estimated costs equal the spread cost once plus slippage on entry and exit, opening and closing commissions, and financing or holding costs. The calculator also subtracts these assumptions from gross profit or loss to show net results.
How to use this calculator correctly
- Step 1. Enter quantity and the monetary value of one price point per unit or contract.
- Step 2. Use the whole bid–ask spread, in price points, once for the round trip.
- Step 3. Enter expected adverse slippage per side and commission per side for the full position.
- Step 4. Add estimated financing or holding cost and compare net and gross results for a favourable or adverse price move.
Worked comparisons
These are illustrative arithmetic examples, not forecasts or market quotations. They show how changing assumptions affects the calculation.
| Cost component | Illustrative assumption | Estimated cost for 10 units at £1/point |
|---|---|---|
| Full bid–ask spread | 1 point | £10 |
| Entry + exit slippage | 0.5 point each | £10 |
| Commission | £5 per side | £10 |
| Total before financing | All of the above | £30 |
How to interpret the results
For an assumed 10-point favourable move across ten units worth £1 per point, gross profit is £100. After £30 of illustrative execution and commission costs, the net result is £70 before any financing, taxes or other broker charges. This is not a broker quote. Spread and slippage often widen when liquidity deteriorates, especially around news releases, market gaps or thin trading sessions.
Common mistakes and limitations
- Distinguish a single full bid–ask spread from paying a full spread twice; the calculator models it once per complete round trip.
- Commission may be quoted per share, per side, per lot or per contract. Convert it to the full position and side first.
- Real costs can include regulatory fees, stamp duty, borrow fees, currency conversion and funding arrangements not automatically modelled.
Further questions
Why is break-even larger than zero points?
The trade must first overcome spread, slippage, commissions and financing before a net profit appears.
Is financing always charged?
No. It depends on product, broker, long or short financing conventions and holding period.
Can spread costs change after entering a trade?
Yes. Quoted spreads can vary with liquidity, volatility, the trading venue and the broker.
Related Traders MBA learning and references
Read the relevant educational analysis, tools and primary-source specifications:
Figures are illustrative and depend on input assumptions. This material provides general education, not financial advice, trading signals or a forecast. Verify instruments, exchange or broker terms and execution costs before relying on a calculation.