Blotter

Unlike a police blotter that's used to record crimes, a blotter used in the financial industry is simply a record of all the details of trades made in a day.

It includes the price, quantity, time, and whether it was a buy or sell order. This obviously is not done by hand, but via a software program with a data feed. It’s used to document trades in the stock and bond markets, foreign exchange, commodities, and the options markets. A trader can customize it to meet his or her own needs. And let's face it...even a trader has needs.

So at the end of a long trading day, Joan runs a report from her blotter and goes over all the buy and sell orders for the day. She can immediately see where she needs to improve for the next trading session, such as when she should have bought or sold a particular stock at the best price. It can also come in handy to fight lawsuits, or for when the manager calls her into the office to ask about a customer complaint, or why she didn’t make her quota that day.

Blotters are examined closely by the firm’s own monitoring department, as well as by the Securities and Exchange Commission (SEC), to look for any red flags, such as insider trading, favoritism to clients that pay a higher commission, or substantially different sale prices for the same stock.