Trading
What is Contra Trading?
By Investment Stab  •  March 16, 2017
Contra Trading, is the act of 1) buying a stock and selling it before payment date 2) selling a stock and buying it back before payment date In Singapore, after a trade is executed, you have three working days before you need to pay the total cost of the stock. If you buy a stock on Monday, you are only required to pay the total cost of the trade on Thursday. However, in contra trade, you sell the stock before you are required to pay on Thursday. You can sell on Monday, Tuesday, Wednesday or Thursday. This effectively means you do not have to fork out a huge amount of money to pay for the stock. In this scenario, you earn or pay the difference between the selling price and the buying price. Recommended Post: Singapore Retirement, Re-Employment, CPF Withdrawal Age
Example 1: Normal Buying and Making a Profit
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By Investment Stab
We are a group of Singaporean students who are curious and interested in Finance. As we dive deeper into this area in search of more knowledge, the more debates and differences we have. We also realised that financial literacy is not strongly inculcated in the younger generations, leading to numerous costly mistakes. Some of such includes believing in "high profiting" scams such as land banking and buying unnecessary investment schemes which are often motivated by the salesperson's personal interest ...
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One response to “What is Contra Trading?”

  1. zac says:

    hi,is this updated?sgx had plans to change contra trading to collaterised trading.did it not happen?

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