What it means
Every trade in a brokerage account creates a record. The purchase and sale statement brings together the matching buy and sell sides, so the customer can see the entry price, the exit price, the number of units and the fees charged.
In futures markets, the statement is typically issued when a position is offset. If a trader buys a contract and later sells the same contract, the statement shows both transactions and the realised profit or loss between them.
The difference between realised and unrealised results matters. Realised profit or loss arises when a position is closed, whereas an open position carries an unrealised gain or loss that changes with the market each day and appears on a separate statement.
Businesses use these statements for accounting and control. The finance team matches them to the broker's confirmations, the cash movements on the bank statement and the entries in the ledger, which supports the audit trail.
Any difference between the documents is investigated before the month is closed. The statement also underpins tax reporting and hedge accounting.
Realised results from trading must be recorded in the correct period, and companies that use futures to hedge price risk need to show how the gain or loss on the hedge offsets the movement in the item being protected. The nuance is that names and layouts differ between brokers and countries.
Some firms call the same document a trade confirmation or a closed-position report, so it is worth asking exactly what each statement shows and when it is issued. Treasury teams often agree the format with the broker when the account is opened.
In practice
Real-world examples.
Example
A jewellery manufacturer buys futures to lock in the price of gold for next quarter's orders. When it sells the contracts after receiving the metal, the broker sends a statement showing a $12,400 gain, which the finance team offsets against the higher cost of the physical gold. The net effect is that the manufacturer pays close to the price it budgeted.
Example
A farm cooperative sells wheat futures to protect against a fall in price at harvest. After closing the contracts, the statement shows a small loss, and the accountant matches it to the better price that the cooperative obtained for its crop. Without the hedge, the lower crop price would have appeared as an unexplained shortfall in revenue.
Example
An internal auditor tests a trading firm's controls by taking a sample of statements and agreeing each to the trade blotter and the bank. She finds a missing commission charge of $350 and raises it with the broker. The broker confirms that the charge was missed and issues a corrected statement.
Formula
Calculation
Net realised result = (sale price - purchase price) x contract size x number of contracts - commissions and fees
Suppose a metals trader buys 2 gold futures contracts at $2,000 an ounce and later sells them at $2,030. Each contract covers 100 ounces. Gross gain = (2,030 - 2,000) x 100 x 2 = 30 x 200 = $6,000. Commissions and fees total $60. Net realised result = 6,000 - 60 = $5,940.Case study
Seen in the real world.
Harvest Mill Foods is an illustrative, fictional flour producer that uses futures to hedge wheat prices. The accounts assistant recorded a futures gain from the broker's statement but missed that the statement was for only half of the contracts.
At month end, the controller reconciled the futures account to the full set of statements. She found $38,000 of gains that had not been booked and a second statement that showed fees charged twice.
The controller corrected the entries, asked the broker to refund the duplicate fee and added a standing check that every statement is matched to the trading log. She also arranged for the broker to send statements directly to the finance mailbox, not only to the trading desk. The illustrative lesson is that these statements are source documents, and they only protect a company if they are read and reconciled every month.
Watch out
Common mistakes.
- Filing the statement without reconciling it to the company's own trading records, which allows errors and missing trades to go unnoticed.
- Ignoring commissions and fees, which can turn a small apparent gain into a loss.
- Confusing it with a statement of open positions, which shows unrealised results rather than completed trades.
Questions
People also ask.
What does a purchase and sale statement show?
It shows the matched purchases and sales, their prices and quantities, the fees charged and the profit or loss that resulted.
How is it different from a trade confirmation?
A confirmation records a single trade as it happens, while a purchase and sale statement links the opening and closing trades and states the outcome. In practice, many brokers combine the two in a single daily report.
Who needs to keep the statements?
Traders, finance teams and auditors all need them, and they should be kept for the period required by tax and accounting rules. Digital copies are acceptable in most places as long as they can be produced on request.
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