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The Big Squeeze on Costs: Have transaction costs bottomed?

Traders Magazine, May 2006

Wayne H. Wagner

What drives the cost of transacting securities? Are the costs of execution supply-driven by cost-of-production factors, or are they demand-driven by the perceived value of transacting? Certainly in recent years, costs have plummeted. Take a look at the chart below of total U.S. transaction costs year by year for institutional investors, as measured by the Plexus Group.

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