Business & Finance
Stock Market
Stock Options and Futures
Stocks

What is contra in stock trading?

Answer

Wiki User
10/31/2009

When you buy stocks, the actual stocks get delivered to your trading account only after 3 business days and you pay for the stocks only when they are delivered BUT you are already the owner of the stocks BEFORE they are delivered or PAID FOR. As such, if you sell those stocks within that 3 days, a cash difference of your profit or loss will result in your account without ever owning the stock or paying for them. This is known as stock contra.