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What is Contract Note in Stock Market? December 04 2021Contract Note , Best Brokerage firm

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What is Contract Note in Stock Market?

Contract notes are one of the most important legal papers available for stock market investors. It keeps track of all transactions at one location, as well as profit and loss information. The availability and legality of important information relating to a transaction makes it critical for an investor or trader to truly understand the market in this document.

Any trade made by a stock broker on a stock market is recorded by a contract note. It confirms a trade executed on the client's behalf on a stock exchange (BSE / NSE) on a given day. This document is sent to you by your broker and contains information about the shares you bought or sold through him. It's also possible that the document will be provided in electronic format with a digital signature.

What are the Contents of a Contract Note?

The primary contract information is outlined in the contract note, which includes the date, period, size, quantity exchanged, and so on. This also gives you a reference number that you can use to double-check transaction data with the stock exchanges.

In a standardized format, a good contract note should have the following information.

·        Trading member/sub-broker's SEBI registration number

·        Order number, transaction size, transaction price, trade time, traded amount, brokerage paid, settlement reference number, and other service charges information are all examples of trade information.

·        For the electronic format, an authorized member's signature or a digital signature is required.

·        Arbitration rules and bylaws

Significance of Contract Note

As the number of people investing in the stock market grows, the odds of fraud and conflict expand as well. SEBI has taken a number of steps to protect the interests of all investors. The digital contract note, which shows the price, brokerage, service tax, and STT in the required format, is one of the first steps in that direction.

An investor can be confident that the order he placed through his broker was executed simply by looking at this document. This paper is required before you can file a lawsuit or arbitration against your broker. You should always count on your broker to provide contract notes on time.

A contract note's primary function is:

·        Estimation of total brokerage fees

·        Capital Gains Calculation

·        In the event of a dispute with the broker, legal evidence is required.

·        Calculation of data for the purpose of filing a tax return

·        Cross-examination of the transactions' authenticity

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost
"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
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