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Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.

 

Term of the day

transaction cost analysis

A method of determining the effectiveness of a company’s portfolio transactions. Transaction cost analysis (TCA) is essentially a rating of the spread between two possible prices – and the difference between those prices is often called “slippage.”

The first number is the price of a particular transaction if it were executed at the prevailing price at the time the portfolio manager decided to buy or sell. The second is the actual price of the transaction, including commissions, taxes and other...