Net return
What is left after paying every cost of trading.
Gross return is what a rule earns on paper, buying at the close and selling at the close as if trading were free. Net return is what remains after commissions, the spread between buying and selling prices, the price impact of your own order, and, for short positions, the fee to borrow the shares.
The gap between the two is where most sold strategies live. A rule that earns twenty basis points gross per trade and pays thirty to trade it is a losing rule, and no chart of the gross return will tell you. Every number in the logbook is net, and each entry also reports what happens with costs doubled, because the costs a beginner pays are rarely the ones in the brochure.
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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, Post-earnings drift, Pre-registration, Published anomaly, Quarterly results, Real costs, RSI indicator, Short side, Survivors only, Terciles.