The expression zero cost strategy alludes to a trading or corporate choice that does not involve any cost to execute.
A zero cost strategy incurs zero expenses on a person or a business while at the same time improving, making processes increasingly effective, or serving to diminish future costs.
As a practice, a zero cost strategy might be used in various settings to improve the performance of a resource.
Utilizing a zero cost strategy implies there are no extra costs to make enhancements or increases to the activities of an organization.
As mentioned above, a business or a person can reduce future costs, along with simplifying and streamlining its present day procedures by utilizing zero cost strategies.
Zero cost trading techniques can be utilized with an array of assets and investments that include equities, commodities, as well as options.
Zero cost strategies likewise may include the simultaneous buying and selling of a security with like costs that cancel one another.
In investing, a zero cost portfolio may see an investor develop a strategy that is dependent on going long securities that are expected to witness a price rise and short securities that are expected to witness a price fall; a long/short strategy.
For instance, an investor may decide to borrow Rs. 70 worth of company ABC stock and sell the Rs. 70 stake in company ABC, then reinvest that money into company XYZ.
Following a year, with an assumption that the trade was carried out as expected, the investor sells company XYZ to purchase back and return the stock of company ABC they borrowed.
The return on this zero cost strategy is the return on company XYZ minus the return on company ABC.