A contract note is a crucial document generated by your broker after each trading day. It serves as a comprehensive record of all your transactions executed during that session. It’s essentially a detailed bill of your trading activity.
Content
The contract note includes the following key information for each trade:
- Security: The name and type of security traded (e.g., stock name, option contract).
- Quantity: The number of shares or contracts bought or sold.
- Price: The price at which the trade was executed.
- Trade Date and Time: The date and time the trade took place.
- Trade Type: Whether it was a buy or sell transaction.
- Order ID: A unique identifier for each trade.
- Brokerage and other charges: Fees and taxes associated with the transactions.
- Settlement Date: The date when the trade will be settled.
Delivery
Contract notes are typically sent electronically to your registered email address at the end of each trading day.
Benefits of Reviewing Contract Notes
- Transaction Verification: This allows you to verify the accuracy of your trades and identify any discrepancies.
- Record Keeping: Provides a detailed record of your trading activity for accounting and tax purposes.
- Performance Tracking: This helps you track your trading performance and analyze your trading strategies.
- Dispute Resolution: Serves as evidence in case of any disputes regarding trades.
- Reconciling with Demat Account: Useful for reconciling trades with your demat account holdings.
Importance
It is highly recommended that you carefully review your contract notes each day to ensure accuracy and promptly report any discrepancies to your broker. This practice is vital for maintaining accurate records and protecting your investments.
Conclusion
The contract note is an essential document for every trader. It provides a comprehensive record of daily trading activity, enabling verification, record-keeping, performance tracking, and dispute resolution. Regular review of contract notes is a crucial aspect of responsible trading practices.