Contra
Transactions
The procedures in giving orders to buy and sell in a contra transaction are the same. The
only difference is that the client pays the broker or the broker pays the client for the difference
in price between his buy and sell transaction.
If the buy
cost is higher than the sell proceeds, it results in a contra loss which the
client pays to the broker.
If the
sell proceeds are higher, it results in a contra profit which the
broker pays to the client. |
Contra dealing is not a right of the client but rather a privilege accorded by the
stockbroking company to its clients. This means that the stockbroking company is not obliged to
allow contra dealing facilities for all its clients.
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