WHAT IS 'Deal Slip'

A deal slip is a record of the details of a foreign exchange transaction and is a primary way for forex brokers to maintain accurate records. Depending on the regulations in the jurisdiction where the transaction is recorded, each deal slip (also known as a “deal ticket”) must be retained for a specific period. While deal slips are used in foreign currency trading, the term also applies to trading activity in other financial markets including stocks, bonds and options.

BREAKING DOWN 'Deal Slip'

Deal slips essentially function as “receipts” for trades, providing proof that a transaction was executed at a specific price. Each bears an individual serial number and includes information such as the date and time of the transaction, the price of the trade, the transaction type (long or short) and the settlement date. In addition, the deal slip identifies the parties involved in the trade.

Although deal slips have been used long before electronic trading became common, some are still printed on paper although many trading firms now record and store this information in digital form.

How Deal Slips are Used

Once a trade has been executed, the deal slip provides a record that can be used for maintaining internal accounting reports, classifying trades for auditing and tax purposes, and categorizing transactions for analysis of trading patterns.

After representatives from a firm’s trading desk complete a deal slip, it is usually forwarded to the organization’s back office so that the trade can be confirmed with counterparties and then closed by the settlement date.

Deal slips are an essential control for minimizing errors and auditing a firm’s records — giving all parties more confidence that markets are functioning properly.

The misuse of deal slips can even reveal fraudulent activity. For example, in 2009 The Wall Street Journal reported that disgraced investment advisor Bernie Madoff had asked assistants to generate falsified trading tickets. Researching past prices for specific securities, these assistants used that data to create documents for trades that had never been executed but aligned with Madoff’s claims for his steady annual returns.

In another case, British securities broker Jonathan Bunn was issued a lifetime ban by the country’s Financial Services Authority (FSA) in 2010 for fraudulent trading that cost his firm, Lewis Charles Securities, more than 2.6 million British pounds. Investigators discovered that Bunn had falsified deal slips that resulted in his firm holding an unmatched short position of more than 6.9 million shares of HSBC Holdings, leaving the firm vulnerable to high losses.

RELATED TERMS
  1. Pink Slip

    A pink slip refers to a notice of dismissal given to an employee.
  2. Deal Ticket

    A deal ticket is a record of all the terms, conditions, and basic ...
  3. Trade Date Accounting

    Trade date accounting is a method company accountants and bookkeepers ...
  4. Transaction Date

    A transaction date in the date upon which a trade takes place ...
  5. Fictitious Trade

    A fictitious trade is a trade that is booked with an execution ...
  6. Accounting Records

    Accounting records include all documentation involved in the ...
Related Articles
  1. Tech

    5 Useless Financial Products That Will Disappear Soon

    Bank deposit slip: what's that? Everyday tools of our financial life that went from indispensable to obsolete.
  2. Insurance

    8 Reasons M&A Deals Fall Through

    Mergers and acquisitions can mean big success. But what about all the deals that fall through?
  3. Personal Finance

    Front Running and the HSBC Trading Scandal (HSBC)

    Two HSBC executives have been accused of front running by the SEC. What is front running and are regulators cracking down on it?
  4. Insights

    5 Tips To Avoid Investment Fraud

    Investor fraud is an unfortunate reality of the industry. Learn how to minimize the risks with these tips.
  5. Taxes

    The truth about IRS tax settlement firms

    These companies claim that they can reduce or even eliminate what you owe to the IRS. Find out the facts behind this alluring fiction.
  6. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  7. Investing

    Investopedia's Guide to Watching 'Wizard of Lies,' HBO's Madoff Movie

    Who's who, and all the financial background you need to watch HBO's tragic "The Wizard of Lies."
  8. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  9. Managing Wealth

    How To Avoid Falling Prey To The Next Madoff Scam

    Due diligence does work, but the loose reporting standards for hedge funds make extra care and attention necessary.
RELATED FAQS
  1. Do I own a stock on the trade date or settlement date?

    Find out why you don't become a legal shareholder until the settlement date. Read Answer >>
  2. What do T+1, T+2 and T+3 mean?

    For security transactions, T+1, T+2, and T+3 refer to settlement dates which occur on a transaction date plus one, two and ... Read Answer >>
  3. How long does it take to execute an M&A deal?

    Read about the mergers and acquisitions process, and find out why the average M&A deal can take half a year to three years ... Read Answer >>
Hot Definitions
  1. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  2. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  3. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  4. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
  5. Dividend

    A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
  6. Inventory Turnover

    Inventory turnover is a ratio showing how many times a company has sold and replaces inventory over a period.
Trading Center