Transaction cost is the flat fee Fincanva charges once for each trade execution in a backtest. It is a fixed amount per fill — not a percentage of the order's value and not a charge per share — so a large order and a small one carry exactly the same fee. It models the commission a broker charges to execute a trade, and it is the fee half of trading costs; the price half is slippage, which is proportional.
Also seen as: transaction fee, commission, brokerage commission, "Trading costs" (the results label).
How is transaction cost charged?
One execution, one flat fee, added to the cash flow of that execution. Because a buy and a sell are two separate executions, a full round trip on one holding costs the fee twice. Nothing about the fee scales with the order: doubling the size of a trade does not double its fee.
That has one practical consequence worth reading off directly — a flat fee is a larger share of a small order than of a large one. The same fee is a rounding error on a 20,000 order and a visible bite out of a 200 one, so it weighs most on strategies that trade small amounts often.
Slippage works the other way round: it is proportional, so it scales with the value traded. The two are separate components and both are switched in by the same costs toggle.
Defaults in Fincanva
- The fee is a flat 1.2 per fill, in the simulation's base currency.
- It is a fixed platform assumption today — there is no setting in the app for changing the per-trade fee.
- It is charged only when Costs & interests is on; with costs off, the modelled transaction cost is zero.
- Every execution counts separately, so the total for a period follows the number of fills, not the amount of money traded.
- In results it is aggregated with slippage: the "Trading costs" figure and the "Costs" column in the positions view carry both.
Worked example
A strategy holds 10 positions and rebalances monthly, and each rebalance replaces about half the book — 5 sells and 5 buys, so 10 fills a month, 120 fills over a year. At 1.2 per fill that is 120 × 1.2 = 144 in transaction cost for the year.
What that costs depends entirely on the capital, because the fee does not scale with it. On 10,000 of starting capital, 144 is about 1.4% of capital consumed by fees in one year. On 100,000 running the identical strategy, the same 144 is about 0.14%. Same trades, same fee count, ten times less drag — which is why per-trade fees hit small accounts and high-turnover strategies hardest.
The figures on this page describe what Fincanva models, not what you should do with your money — see Is this financial advice?.
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Fincanva provides no financial advice. Backtests show what would have happened — not what will.
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