# Formula for Implementation Shortfall

Having trouble remembering the formulas for implementation shortfalls, It’s confusing to me on when to use the “benchmark” vs “close of the day” price. Anyhow here’s what I have written down, feel free to post comments/corrections. Explicit Cost = Commish/Total \$ Value of Trade Realized PL = (Filled order/Total order) x ((Executed Price - Prev Closing Price) / Benchmark) Delay = (Filled order/Total order) x ((Closing price of the day when order is not 100% filled - Prev Closing)/Benchmark) Opportunity Cost = Unfilled / Total x (Closing price of the day when order is cxl - Benchmark)/Benchmark) Thanks

Are you sure the formula for Delay is right? key is to realize the combination of realized PL + delay is equivalent to PL on the filled order over the benchmark. Shouldn’t they be: Realized PL = (Filled order/Total order) x ((Executed Price - Prev Closing Price) / Benchmark) Delay = (Filled order/Total order) x ((Prev Closing - Bechmark)/Benchmark)