Trading cost base
Turnover costs, financing, fixed costs and the draw.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: trading cost base.Updated 30 October 2026
What it does
Every cost a trading business pays whether its strategy wins or loses. Exchange, clearing and commission scale with the notional traded, which is capital deployed times position size times turnover; financing scales with exposure above capital. Market data, software, regulatory and accounting fees, an office and the owner’s draw are fixed. Together they set the return the strategy has to clear before the business earns anything.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 36–48: Turnover: gross exposure traded a month, Exchange, clearing and commission per unit traded, Financing and margin interest, a year, Market data and terminal…
- Cost Base, rows 6–8: Capital deployed, Gross exposure, Notional traded
- Cost Base, rows 11–13: Exchange, clearing and commission, Financing and margin interest, Costs of trading
- Cost Base, rows 16–21: Fixed costs: market data, software, fees and office, Owner’s living draw, Total costs and draw, Share of outgoings that are fixed…
What a reviewer looks for
- Commission charged on capital rather than on what is traded.
- Market data and software left out because they feel like overheads.
- Financing charged on the whole position rather than on the part above capital.
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