Trader Definition – TANSTAAFL

Trader Definition – TANSTAAFL

‘There Ain’t No Such Thing As A Free Lunch’

An acronym that attempts to describe the cost of decision making and consumption. “There ain’t no such thing as a free lunch” (TANSTAAFL) expresses the idea that even if something seems like it is free, there is always a cost, no matter how indirect or hidden. 

In finance, TANSTAAFL refers to the opportunity cost paid to make a decision. The decision to consume one product usually comes with the trade-off of giving up the consumption of something else.

Investopedia explains 

This phrase is thought to have originated because many saloons in the U.S. used to provide free lunches to their patrons, but required them to purchase drinks in order to get them.

Although the phrase is a double negative, it is not intended to be interpreted as such. Therefore, the alternate acronym TINSTAAFL is often used.

SOURCE: Investopedia

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