Definition 
The total amount of capital used to initiate a trade, representing the total investment made in the asset.

Formula
(Stocks, Futures, Options)

• Cost = Sum of (Price per Share/Contract * Number of Shares/Contracts) for all executions within the trade

Example (Stocks)

• Buy XYZ @ $1 – 100 Shares
• Sell XYZ @ $1 – 50 Shares
• Buy XYZ @ $2 – 100 Shares
• Buy XYZ @ $3 – 100 Shares
• Sell XYZ @ $1 – 250 Shares

Total Cost = (1 x 100) + (2 x 100) + (3 x 100) = $600

Considerations

• Asset Class: This concept is directly applicable to stocks, futures, and options.
• Forex Margin: For forex trading, a similar concept might be “Margin Used”, representing the amount of capital allocated to the trade.