A trading method whereby traders take advantage of the delay in settlement– i.e., the period of three days (known as the contra period) after the trade is executed (T+3). A trader would buy and resell shares within the same settlement period to avoid making any payment (cash upfront). Contra-trading is typically commonplace in day trading, where a speculator buys shares during the day and resells them before the close of trading; both transactions settle on the same day (e.g., T + 3) with the speculator having no gross cash outflow (capital outlay). With contra trading, speculators can make a profit without having to fork out capital.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments