When you begin placing trades through your brokerage account with your new stockbroker, you will get something known as a trade confirmation. This trade confirmation will send you an email.
In addition, if you choose a paperless delivery, the downloadable format is available for you such as Adobe PDF. It will be very useful whenever your broker executes a buy or sell order for you.
Depending upon your brokerage firm or broker, the information on a trade confirmation will vary. On the other hand, there are some things that you should highlight.
What You Might Find on a Brokerage Trade Confirmation
- The name of the investment you traded, along with the ticker symbol
- Total shares bought or sold
- The cost or selling price per share
- The commission paid to the brokerage firm (it depends upon the specifics. If your broker was acting for you in a dealer capacity, you may see bond spreads on fixed income securities)
- The trade execution date when trading
- The settlement date. The day the money and investment, such as shares of stock and transfers (if you have your purchases or sales settled against a bank account, this is the date the money take out or deposit into your account)
- The total gross value of the transaction
- The total net value of the transaction after deducting brokerage commissions
- The account number when trading
- The type of order that was used; such as a market order, limit order, and so on
Be Thorough to Examine Your Broker’s Trade Confirmations
The trade confirmation is extremely important because it is your way of verifying that the broker has filled an order according to your instructions.
If you notice that the trade confirmation includes information on it that you believe is in error, you must contact your bank or broker immediately to fix it.
Keep all of your trade confirmation copies accurate to prove your own trade. It will be extremely useful when it comes time to file your taxes; tracking capital gains and losses will be much simpler.
Investment Advisor Might Have Copies of Confirmations
You can also use these trade confirmations to reconcile the statement from your custodian with the statement from your advisor. Therefore, you and your accountants, attorneys, or private bankers can better audit the activity in your individually managed account.
If you work with a Registered Investment Advisor, the individual advisor representative overseeing your portfolio may have copies of your trade confirmations, or be able to get them for you, though it’s still best to maintain your own records.