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OVERTRADING COST

More trades means more charges.

Published by The Retail Trader · JUL 31, 2026 · Risk Management

Overtrading Cost — More trades means more charges. Many small traders are worried not from the market but from their high turnover.

WHERE THIS FITS IN

This term comes under Risk Management, in the section "Calculation of COST". Cost is also a type of risk, because it is charged on every trade – not profit:

RELATED TERMS TO READ

Other terms in this group — understanding them together is more useful:
• Brokerage
• STT (Securities Transaction Tax)
• Exchange Transaction Charges
• GST and Stamp Duty
• DP Charges
• Total Round-Trip Cost
• Slippage Cost

To read the entire group and all its examples at one place, see the journal "RISK MANAGEMENT: DICTIONARY OF AVOIDANCE" - this term has been taken from there.

This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.

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