Tag Archives: Contra Trade

What is Contra Trading in Share Market?

Do you know what is contra trading? It’s a stock trading technique where you will be given 3 days (known as T+3) to pay up for shares that haven been bought. But, if you sell the shares within these 3 days without paying then it’s called contra trading.

contra_trading

Normally, people will use this technique with the intention to make profit. Let say you bought RM1,000 worth of local stock at RM1 on Monday. On the Wednesday, the price went up to RM1.10 and you decide to sell it off. Based on this, you do not have to pay up for the RM1,000 because you have already sold the stock. In fact, the brokerage firm would credit to you 10 cents of profit per share, all without you depositing money.

Continue reading