Trade Confirmations
A confirmation is the legal record of a transaction and it carries disclosures that appear nowhere else, including how your broker acted and what it was paid.
MadStockAlerts Research · Updated August 29, 2026
What to take away
- A confirmation is required for every transaction and is a legal document.
- It states whether the broker acted as agent or as principal, which is a real difference.
- Any markup or markdown on a principal trade is disclosed on it.
- The settlement date on it governs when cash and securities actually move.
- It is the record to check against, and the window for disputing is short.
MAD Academy Training Video · 0:46
The Receipt Worth Reading Once
A confirmation is the legal record of what happened, and it discloses the capacity, the venue and the fees the ticket price hides.
This lesson is part of a Stock Alerts + Tools plan.
What has to be on it
| Field | What it tells you |
|---|---|
| Trade date and settlement date | When it happened, and when it completes |
| Security, quantity and price | The transaction itself |
| Capacity | Whether the broker acted as agent or as principal |
| Commission or markup | What the broker was paid, in the form appropriate to the capacity |
| Yield, for a bond | Required, and frequently the only place it appears |
| Whether it was a solicited order | Whether the broker recommended it |
The last row exists for a reason and is worth checking. A trade marked solicited was recommended by the firm, and that classification matters if the transaction is ever disputed.
Agent or principal
Acting as agent means the broker arranged the transaction with a third party and charged a commission. Acting as principal means it sold you the security out of its own inventory, and its compensation is embedded in the price.
| Agent | Principal | |
|---|---|---|
| Counterparty | Another party in the market | The broker itself |
| Compensation | A stated commission | A markup or markdown in the price |
| Where it appears | Itemised | Disclosed as a markup, where required |
| Common in | Listed equities | Bonds and many over-the-counter securities |
The distinction matters most in fixed income, where principal transactions are the norm and the markup is the cost of the trade. A bond bought at a stated yield with no visible commission was not free; the compensation is in the price and it is disclosed as a markup.
Settlement, and what it governs
US equity transactions settle one business day after the trade date. Settlement is when the securities and the cash actually change hands, and several practical consequences follow from the gap.
- Ownership for the purpose of a dividend or a vote is determined at settlement, which is why the ex-date precedes the record date.
- Cash from a sale is not available for withdrawal until settlement.
- In a cash account, buying with unsettled proceeds and then selling before settlement is a violation.
- Different instruments settle on different schedules, and some fixed income and international securities take longer.
Checking it, and the dispute window
A confirmation should be checked on receipt against what was intended: the security, the quantity, the price, and whether it was marked solicited. It arrives quickly for exactly this reason.
Account agreements typically deem a confirmation accepted if not disputed within a stated period, often ten days. After that, correcting an error is considerably harder, and the burden shifts to the account holder.
It is also the document that matters if a dispute ever reaches arbitration. A record of what was confirmed at the time, and when, is the primary evidence of what was actually agreed.
The details worth checking on each one
Most confirmations are correct and reading each one takes seconds. The checks below catch the errors that occur, and each has a specific consequence if it goes unnoticed.
- 1The securitySimilar symbols and share classes are the most common source of an unintended position.
- 2The quantity and the sideIncluding whether a sale closed a position or opened a short one.
- 3The price against the market at the timeA fill far from the prevailing quote is worth a question while the records are fresh.
- 4The capacity and any markupParticularly on bonds, where the cost is entirely in the price.
- 5Whether it is marked solicitedWhich is the firm's own record of whether it recommended the trade.
The last step is worth a moment because it is the field a firm's records will rely on later. A trade the customer initiated should not be marked solicited, and a recommendation that is marked unsolicited misrepresents what happened.