What is a Contract Note?

A contract note is an official record of the trades executed through your stockbroker during a trading day. It helps you check the details of your buying and selling transactions.

• Trading period: It records trades carried out during 1 trading day.
• Transaction types: It can include 2 transaction directions — buying and selling.
• It shows the securities traded, quantities, prices, execution times, and applicable charges.
• It helps you check the gross and net amounts related to your trades.
• It serves as an official record that can be referred to if there is a dispute with your broker.
• Contract notes may also include brokerage, securities transaction tax (STT), GST, and other applicable charges.
   

A contract note in the stock market records the trades completed by your broker for you during a particular trading day. It acts as an official record of transactions carried out through your broker.

Here are some of the details you may find in a contract note:

Also read: Pairs trading

A contract note records the trades or transactions carried out by your broker on your behalf during a trading day. It is generally provided in a standard format containing different sections for trade and charge details.

Per-unit gross rate

The per-unit gross rate is the price at which your trade was executed by the broker.

Buying and selling

This section shows whether the transaction involved buying or selling securities.

Per-unit brokerage

Per-unit brokerage refers to the brokerage charged on the trade.

Quantity of transactions

This section shows the number of shares or securities traded. Depending on the format used, the contract note may distinguish between quantities bought and quantities sold.

Net total (before levies)

This is the value of the trade before applicable levies and other charges are added or deducted.
 

A contract note gives you a detailed record of the trades carried out through your broker and helps you check whether the transaction details match your orders when making an investment in the stock market.

• A contract note confirms the trades executed for you on a particular trading day, including the securities bought or sold, quantity, price, and execution details.
• It clearly shows the gross and net amounts related to your transactions, along with brokerage and other applicable charges.
• It helps you review your trades and identify any differences between the orders you placed and the transactions that were actually executed.
• An electronic contract note keeps your trade and charge details in one place, making it easier to maintain records and refer to past transactions when required.
• It can also serve as an official record if you need to raise a query or dispute regarding a transaction with your broker.

Also read: Stock vs ETF

A contract note provides a clear and detailed record of the transactions carried out through your broker. It helps you review important trade information, including the securities bought or sold, quantity, execution price, brokerage, securities transaction tax (STT), GST, and other applicable charges shown in the prescribed format.
By reviewing the contract note, you can check whether the trades recorded by your broker match the transactions carried out during the trading day. It also helps you maintain an organised record of your trading activity for future reference.
A contract note can also serve as supporting documentation if you notice any difference in your transaction details or charges. If a dispute with your broker requires complaint resolution, arbitration, or other proceedings, the contract note may be used as an official record of the trades concerned.
 

Also read: Equity share and preference share
 

A contract note is an important record of the trades carried out through your stockbroker. It helps you check transaction details such as securities bought or sold, quantities, prices, brokerage, taxes, and other applicable charges.
The document can also help while reviewing transactions and maintaining records for tax-related purposes. Since it serves as an official record of your trades and may be useful if a dispute arises with your broker, keeping your contract notes safely for future reference can help you verify transactions when required.