What is a Contract Note in Trading?

A legal binding document that outlines the specifics of the stock market transactions that a broker has carried out on behalf of their client is what is a contract note for shares.

This document includes essential information such as the time and date of the trade, the type and quantity of shares bought or sold, the price at which the transaction was executed, and the brokerage or transaction charges involved.

What is a contract note for shares, and why is it important?
A contract note for shares acts as a confirmation that a trade has been executed successfully. It contains comprehensive details regarding the trade, including:

Trade Date and Time: When the transaction occurred.
Stock Details: The type of stock and the amount of shares exchanged.
Trade Price: The price at which the shares were bought or sold.
Brokerage Fees: The commission charged by the broker for facilitating the transaction.
Other Charges: Statutory charges like GST, Securities Transaction Tax (STT), Stamp Duty, etc.
A contract note is important because it provides legal protection to both the trader and the broker. It ensures transparency and helps resolve disputes if there are any discrepancies in the trades. Moreover, in India, regulatory bodies like the Securities and Exchange Board of India (SEBI) mandate that brokers issue contract notes to clients after every trade.