A Contra Account operates similarly to a margin account in traditional brokerage firms, allowing traders to leverage their investments by borrowing funds or securities from the brokerage firm. A Contra Account works like a credit card. This means you have a spending cap based on the shares you want to buy, the cash you put up as collateral, and the number of shares you want to buy. However, you still have two days to settle your transaction(s) in full. In Malacca Securities Sdn Bhd, we have two types of Contra Accounts. Features: 1. Extended Trading Limit: With a Contra Account, traders can trade up to 2~3 times more than the money they have in their account. This leverage allows traders to potentially amplify their gains (or losses) compared to trading with only their own funds. 2. Referral Program: This program likely offers rebates or incentives for traders who refer another traders that frequent in trading activities. 3. Interest on Available Cash Balance: The available cash balance in the Contra Account earns interest at a rate of 1.85% per annum. This provides an additional benefit for traders who may have unutilized cash in their accounts. 4. Settlement Period: Transactions made through the Contra Account require settlement two days after the transaction date (T+2). This means traders have a brief period to settle their transactions, either by earning profits or by making payments to cover losses. Overall, a Contra Account offers flexibility and leverage for traders, allowing them to potentially maximize their trading opportunities while managing their risks. It's important for traders to understand the risks associated with leveraged trading and to use such accounts responsibly.
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