Real costs
Every fee, spread and slippage a trade actually pays, as a small account pays it.
A trade costs more than its commission. There is the spread, the gap between the price you can buy at and the price you can sell at. There is slippage, the difference between the price you saw and the price you got. For shorts there is the borrow fee, and for leveraged positions the funding. For a small account, each of these is larger in proportion, because the fixed parts do not shrink with the order.
Real costs are the costs the logbook charges: the ones a person with a modest account would actually pay, not the ones a large fund negotiates. Each entry also reports the result with costs doubled, because friction is the one number every seller underestimates and every beginner discovers late.
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Where this word comes up
First needed in the log entry H-042 · The post-earnings bounce did not survive our cost assumptions.
From the same entry: Backtest, Basis point, Buy the dip, Correction for looking twice, Gross edge, Index membership, Large caps, Net return, Post-earnings drift, Pre-registration, Published anomaly, Quarterly results, RSI indicator, Short side, Survivors only, Terciles.