Chapter 3: Transaction Costs
Transaction cost analysis (TCA) has regained a new-found interest in the financial community because of the proliferation of algorithmic trading. Portfolio managers and traders are using TCA to evaluate the performance of brokers and their algorithms. Furthermore, TCA is used by portfolio managers to improve performance as part of their stock selection and portfolio construction process.
Currently, there are many investors who utilize TCA to select their trading algorithms and make informed trading decisions. Those investors who are not yet utilizing TCA as a decision-making tool are missing valuable opportunities to improve portfolio performance and increase returns.
TCA has evolved significantly over the last ...
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