If you are a trader or investor, then most probably you must have
heard about the contract note. Now, the biggest issue with people is that
almost everyone has heard of contract mote, but not everyone knows what it is.
Therefore, today we will be flashing some points on what is a contract not? And
what all are mentioned in the contract note that your broker mails you. And
also the uses, be it day to day or for any legal matter against your broker.
So, without wasting any time, let's get started with the basic contents of a
contract note.
What are the things mentioned in your contract note?
Whenever you punch a successful trade in your broker's terminal,
you are legally expected to get a contract note from your broker at the end of
the day. A contract note generally has the below-mentioned figures which
highlight the activity of that particular period:-
Basic info such as
·
Name
·
Unique ID with the broker
·
Demat number
·
Date- This is the number that specifies the trading day or period
whose figures are mentioned in the document
·
Quantity of shares exchanged- This figure shows the individual and
net number of shares exchanged by you on that particular day/period. For
example, if you have bought 1000 shares of company X on a particular day, then
it will show you +1000 shares for that company in the table. And if you have
traded multiple times, then each of the trades in addition to the net shares
credit/debit from your account at the end of the day will be mentioned.
·
Amount- Just like the number of shares is mentioned for each
particular trade along with all netted. You also get the amount of money you
traded each time. This is calculated as no. of shares*share price. For example,
if you bought 1000 shares, each worth 10 rupees and sold all at the end of the
day for rupees 11. Then you will see that your bought amount would be +10000
and sold would be -11000 at the end of the day. Netting these figures would
give you +1000 profit.
All these are the default info that you will get. But a good
broker would also mention:-
·
Your broker's SEBI registration number
·
Order time, brokerage paid, reference id, and all other charges
·
Members E-Signature
·
Arbitration by rules and laws
Why is your contract important?
·
Your contract specifies whether or not your broker executed your
orders. And you would also get to know any false orders punched from your
terminals. Because in case of fraud, you will get to know all the orders which
weren't punched by you.
How Much Capital Do You Require To Trade In The Stock Market?
·
Also, in case of any legal matter, you can show your contract note
sent by your broker as legal evidence.
·
You can easily track your day's activity.
·
You can easily calculate the brokerage you paid.
·
Capital gains tax calculation will be much easier.
·
Would help you at the time of filing your income tax returns.
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