purchase and sale statement: definition, key components, and how it works

The purchase and sale statement, commonly abbreviated as P&S statement, functions as a formal ledger entry that documents the sale or offsetting of a futures or options position between a customer and a Futures Commission Merchant (FCM). Presented as a precise transactional record, the statement consolidates contract details, executed prices, quantities, and resulting profit or loss for reconciliation and regulatory reporting. Market participants rely on the P&S statement to verify trade execution against exchange fills, to feed accounting systems, and to reconcile margins and carrying positions across back-office platforms. In practice, these statements integrate with enterprise accounting and ERP tools—such as QuickBooks, Xero, SAP, NetSuite, and Oracle Financials—and are often exported or mapped into billing and compliance suites from vendors like Wolters Kluwer or Intuit. The P&S statement therefore occupies a critical role at the intersection of trade execution, risk control, and financial reporting for futures traders, hedgers, and clearing members.

Definition

A purchase and sale statement is a formal transactional record from an FCM that documents the sale or offsetting of a futures or options position, including quantities, prices, and resulting P&L.

What is purchase and sale statement?

The purchase and sale statement is a standardized document issued by a Futures Commission Merchant or brokerage to a customer that itemizes the details of a sale or offsetting transaction in futures or options markets. It is used to reconcile executed trades with exchange notifications, confirm the closing or reduction of positions, and provide the raw data for profit-and-loss and margin calculations. The statement typically lists contract codes, lot sizes, executed prices, trade timestamps, commissions, and any related fees or credits; it may also include the resulting gross P&L per line item and a cumulative position summary. In operational workflows, the P&S statement supports back-office reconciliation and is often ingested into accounting systems and treasury platforms for posting and compliance. Because the P&S focuses on discrete sell/offset events rather than ongoing position mark-to-market, it is unique in its role as a transactional audit trail that links trade execution to accounting entries and regulatory reporting obligations.

• Purpose: Formal proof of sale or offsetting action.
• Issuer: Typically a Futures Commission Merchant (FCM) or broker.
• Recipients: Traders, clearing firms, corporate treasury, accountants.
• Integration: Feeds accounting systems like FreshBooks, Sage, and Zoho Books.

Key Features of purchase and sale statement

A purchase and sale statement presents a compact but comprehensive snapshot of a discrete sell or offset transaction. Its structure is optimized for operational clarity and auditability, and several key features distinguish the P&S statement from other trade confirmations or position reports. The document emphasizes explicit transactional fields, often standardized across FCMs, to enable automated ingestion into accounting ledgers and reconciliation engines. It also carries regulatory and compliance metadata that helps firms demonstrate adherence to exchange rules, clearinghouse requirements, and internal control frameworks. Practically, the P&S statement is formatted to reconcile with exchange-provided fills and to align commission and fee records with client billing.

• Transaction identifiers: Unique trade IDs, exchange fill numbers, and timestamps for audit trails.
• Contract specifications: Symbol, expiration, lot size, and deliverable grade if applicable.
• Execution economics: Executed price, quantity, gross P&L, commissions, and fees.
• Settlement indicator: Whether the transaction is an outright sale, offset, or spread adjustment.
• Margin and clearing references: Links to initial and maintenance margin events or references to margin calls.
• Accounting fields: Ledger codes, posting dates, and fields intended for integration with systems like SAP or NetSuite.
• Regulatory flags: Notes for trade reporting, position limits, and audit evidence.

How purchase and sale statement Works

In live trading, the purchase and sale statement is generated after an execution that sells or offsets a futures or options contract. The document pulls key trade details from the execution management system (EMS) and validates them against exchange fills before issuance to the client. Core elements referenced include the underlying asset or commodity, contract month, number of contracts, executed price, and associated commission or clearing fees. Margin effects are linked—either explicitly or via a cross-reference—to initial margin and maintenance margin calculations maintained by the clearinghouse and the FCM.

Operationally, the statement bridges front-office execution and back-office accounting: it provides the granular transactional rows necessary for ledger posting, variance analysis, and profit attribution. For example, if a commodity trading firm offsets 10 crude oil futures contracts at a certain price, the P&S statement will record the executed quantity and price, compute the realized P&L for that leg, and include commission detail for posting to a general ledger in systems such as Oracle Financials or SAP. This post-trade artifact is then reconciled with mark-to-market schedules and margin reports, including references to resources such as the firm’s margin calculation methodology outlined in materials akin to original margin definition and calculation.

• Underlying asset: Futures or options contract tied to commodity or financial instrument.
• Contract specs: Expiry month, lot size, tick value, and multiplier used in P&L math.
• Margin references: Notation linking to margin events or to mark-to-market updates, e.g., see mark-to-market calculation methods.