Transaction costs

Transaction costs are the brokerage, fees and spread paid on every trade — a drag a backtest must charge or it overstates returns.

Every time a strategy buys or sells, it pays: brokerage, exchange and regulatory fees, and the bid-ask spread. Backtests that ignore these report a return no real account could keep. The faster a strategy trades, the more of its paper edge these costs consume.

Thuztra charges a transaction cost on every rebalance leg by default (5 basis points round-trip, configurable), so a high-churn strategy visibly pays for its churn instead of being silently subsidised.

Definitions are educational and consistent with Thuztra’s backtest methodology. Backtests are research, not investment advice; past performance does not predict future results.