What is a “Trade Confirmation slip”?

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Issued to the Investor when shares are bought or sold at the mentioned price

Option (1) Issued to the investor at the time of placing an order by the broker — Incorrect. The slip given when the order is placed is the order confirmation slip. It only confirms the order. At that stage nothing has been bought or sold yet.
Option (2) Issued to the Investor when shares are bought or sold at the mentioned price — Correct. The broker issues the trade confirmation slip once the order is executed. It is the investor’s proof that the trade took place at the price he named. A contract note with full details follows within 24 hours.
Option (3) Issued to the investor at the time of opening a demat account — Incorrect. A demat account is opened with a depository participant before any trading, to hold shares in electronic form. No trade exists yet at that stage.
Option (4) Issued to the investor when shares are delivered or cash is paid by him/her — Incorrect. Delivery of shares and payment are the settlement, the last stage of the deal. The trade confirmation slip comes earlier, as soon as the order is executed.

Note 1: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.

Note 2: In the original question, both Option (2) and Option (3) were correct as per the NTA Answer Key. The paper printed Option (2) as “Issued to the Investor when shares are bought or sold at the mentioned price” and Option (3) as “Issued to investors after the trade has been executed.” For the benefit of students and to ensure a single answer, Option (3) has been changed to “Issued to the investor at the time of opening a demat account”.

NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 5. When the shares can be bought or sold at the price mentioned, it will be communicated to the broker’s terminal and the order will be executed electronically. The broker will issue a trade confirmation slip to the investor. 6. After the trade has been executed, within 24 hours the broker issues a Contract Note. …”