Execution Cost Lab: Trade Cost Estimator
Enter a bid, ask, share quantity, and optional commission to estimate total execution cost in dollars and basis points. See the half-spread cost, slippage estimate, explicit fees, and the break-even price move needed to recover all costs.
Estimate execution costs
Cost estimate
Spread cost is an estimate based on the quoted bid-ask spread. Use "estimate" when sharing or relying on these figures; actual fill costs depend on order type, market conditions, and broker routing.
Cost breakdown
| Component | Amount ($) | Basis points | Notes |
|---|
Key concepts
Bid-ask spread and half-spread cost
The bid-ask spread is the difference between the lowest ask price and the highest bid price. A market order to buy crosses from the midpoint to the ask; a market order to sell crosses from the midpoint to the bid. The cost of crossing is approximately half the quoted spread per share.
Spread cost in dollars = (ask minus bid) / 2 times shares. This is an estimate based on the quoted spread; the actual effective spread depends on your fill price.
Slippage vs. spread
Spread cost and slippage are distinct. Spread cost is the implicit cost of crossing the bid-ask spread. Slippage is the difference between your actual fill price and the benchmark price, which can be positive (unfavorable) or negative (price improvement). Large orders can move the market before filling, adding market impact on top of the quoted spread.
Break-even basis points
Break-even basis points is the price move needed to recover the total execution cost. Formula: total cost in dollars divided by (shares times fill price) times 10,000. A lower break-even figure means the trade starts working for you sooner.
What this tool does not cover
- Actual fill data: enter your real fill price in the Execution Cost Calculator for post-trade review.
- Options, fixed income, or crypto execution costs, which have different spread structures.
- Opportunity cost of not trading.
- Tax lot selection or short-term vs. long-term gain treatment.
Frequently asked questions
What is the spread cost in this execution cost estimate?
Spread cost is the half-spread: (ask minus bid) divided by 2, times the number of shares. A market buy order crosses the full spread from mid to ask; a market sell crosses from mid to bid. The half-spread is the implicit cost relative to the midpoint.
What is slippage and how is it calculated here?
Slippage is the difference between your actual fill price and the benchmark price (midpoint by default), expressed in basis points. It can be negative (price improvement). The slippage estimate input is an additional user-supplied market impact assumption in basis points, layered on top of the quoted spread, to avoid double-counting.
What does break-even basis points mean?
Break-even basis points is how much the price needs to move in your favor after the trade to recover the total execution cost. A 10 bps break-even on a $50 stock means the stock needs to move $0.05 per share to cover all costs.
Is this tool the same as the Execution Cost Calculator?
The Execution Cost Lab uses the same underlying math as the Execution Cost Calculator but focuses on the Plan mode: estimating costs from bid, ask, and an assumed slippage estimate before execution. It does not require actual fill data. For post-trade review against a real fill price, use the full Execution Cost Calculator.