What is Contra Trading?

Contra Trading, is the act of
1) buying a stock and selling it before payment date
2) selling a stock and buying it back before payment date

In Singapore, after a trade is executed, you have three working days before you need to pay the total cost of the stock.
If you buy a stock on Monday, you are only required to pay the total cost of the trade on Thursday.
However, in contra trade, you sell the stock before you are required to pay on Thursday.
You can sell on Monday, Tuesday, Wednesday or Thursday.
This effectively means you do not have to fork out a huge amount of money to pay for the stock.
In this scenario, you earn or pay the difference between the selling price and the buying price.

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Example 1: Normal Buying and Making a Profit I buy 1,000 shares of ABC company at $3.00 per share on Monday. Total I will need to pay $3,000 for these shares on Thursday (excluding brokerage fees) On Wednesday, I sold the shares for $3.10 each. I will earn $0.1 x 1,000 shares = $100 (excluding brokerage fees) I earn $100, and I do not need to pay $3,000 for the shares that I have bought.

Example 2: Normal Buying and Making a Loss I buy 1,000 shares of ABC company at $3.00 per share on Monday. Total I will need to pay $3,000 for these shares on Thursday (excluding brokerage fees) On Wednesday, I sold the shares for $2.90 each. I will lose $0.1 x 1,000 shares = $100 (excluding brokerage fees) I will need to pay to my brokerage firm $100 for the losses I incurred for the trade But I do not need to pay $3,000 for the shares that I have bought.

Example 3: Shorting a Stock and Making a Profit I sell 1,000 shares of ABC company at $3.00 per share (I do not own any shares previously). Total I will take $3,000 in cash and I will need to delivery 1,000 shares of ABC (excluding brokerage fees) On Wednesday, I buy back the ABC shares for $2.90 each. I will earn $0.1 x 1,000 shares = $100 (excluding brokerage fees) I earn $100, and I do not need to deliver the 1,000 ABC shares that I sold.

Example 4: Shorting a Stock and Making a Loss I sell 1,000 shares of ABC company at $3.00 per share (I do not own any shares previously). Total I will take $3,000 in cash and I will need to delivery 1,000 shares of ABC (excluding brokerage fees) On Wednesday, I buy back the ABC shares for $3.10 each. I will lose $0.1 x 1,000 shares = $100 (excluding brokerage fees) I will need to pay to my brokerage firm $100 for the losses I incurred for the trade But I do not need to deliver the 1,000 ABC shares that I have sold.

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Do note that although you are allowed to do Contra Trading in Singapore, there is an additional requirement if you are short-selling and buying back within the 3-day period.
You are required to "borrow" the stock you are short-selling from SGX (you need to have an account approved for short-selling) before you can short-sell.

Revolution to Trading Singapore Stocks 

using Contra Squeezing Techniques

Learning Points
1) How to perform contra trades using contra squeezing strategies
2) How to pick the right stocks for short-term trading
3) How to spot important entry and exit points for trading positions
4) Risk Management for Contra Trades
5) Sneak Peek into new category of Growth stocks

Speaker: Ronald K- Self-made millionaire investor
- Featured in Sunday Times twice for his approach to investing

Event Details:

Date: 25 March 2016 (Saturday)
Location: City Index Asia Pte Ltd, 6 Battery Road

Time: 10.00AM – 3.00PM (registration starts from 9.30AM)
Price: $10 

*Lunch is provided

Click HERE to sign up for the event!

Limited Seats Only! Sign Up Now!

Free Mystery Gift

for the first 20 registrants

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Crowdfunding: Can it ever be secured?

Now you might be thinking we are hypocrites right now, with all the contrasting views on one topic. Well, that is precisely the reason why we set up this site. It is to provide our two cents on finance-related topics so that you can have a more holistic view on issues that impact your finances.

Crowdfunding has been around for quite some time and Singaporean investors are definitely aware of this alternative option that they can use to improve their investment returns (if you are new to crowdfunding, you can read more here). There are also some common names that we have heard in this space as well. Examples are Funding Societies, CoAssets and MoolahSense.

Recommended Post: When Crowdfunding Fails

Compared to the USA, in Singapore, investors do not have the option of raising equity through crowdfunding. Hence, there is only the crowdfunding of debt present here.

However, just as our previous post shows, there are many risks to crowdfunding which warrants higher return rates. Just as how debt can be secured or unsecured, one interesting advancement of crowdfunding is the move towards collateralisation. In many other countries, real estate crowdfunding is the preferred alternative investment as there is the presence of collateral in the form of property or land. A simple search on Google can prove that. The vast supply of land and apartments as compared to fewer approved loans made this even more attractive. Hence, the speed of obtaining funding and lower loan requirements are compensated from the higher rates of return. Though, this will certainly be lower than unsecured crowdfunding.

Given the relatively stable property market in Singapore, secured real estate crowdfunding will provide a good return with lower risks. Interestingly, CoAssets has recently incorporated a real estate subsidiary that focuses on asset-backed crowdfunding and was announced in January. Hopefully, it will be released soon for retail investors to have another investment alternative.

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In our view, this is definitely an attractive option. Just think about it. Having an 8% to 10% rate of return (slightly outperforming the average STI returns - 8.4%) while enjoying the safety of collateral in the form of a property that is comfortably valued more than the loan amount.

If you wish to know more, do read more on crowdfunding or visit CoAssets' website.

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

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When Crowdfunding Fails

Before I proceed, let me make it absolutely clear that I have nothing against crowdfunding. I believe the basic principle behind crowdfunding is sound, and, in a perfect world, it would boost innovation and provide talented, creative people with an opportunity to turn their dreams into reality.

Unfortunately, we live in the real world, and therefore it’s time for a reality check:

Reality /rɪˈalɪti/

noun

1. The state of things as they actually exist.
2. The place where bad crowdfunded ideas come to die.

While most entrepreneurs may feel this mess does not concern them because they don’t dabble in crowdfunding, it could have a negative impact on countless people who are not directly exposed to it:

1. We are allowing snake oil peddlers to wreck the reputation of crowdfunding and the startup scene.
2. Reputational risks extend to parties with no direct involvement in crowdfunding.
3. By failing to clean up the crowdfunding scene, we are indirectly depriving legitimate ideas of access to funding and support.
4. When crowdfunded projects crash and burn, the crowd can quickly turn into a mob.

This is my argument: Entrepreneurs, developers, and enthusiasts have to be committed to weeding out bad apples in crowdfunding, for the greater good of our industry.

But Wait, Crowdfunding Gave Us Great Tech Products!

Continue Reading...

Post Contributed by: Toptal
Toptal is an exclusive network of the top freelance software developers, designers, and finance experts in the world.
Top companies rely on Toptal freelancers for their most important projects.

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Singapore Budget 2017 - U-SAVE GST Vouchers

Announced on the 20th February 2017's Singapore Budget, Singaporeans will receive their annual U-SAVE GST vouchers for year 2017.
The U-SAVE GST Voucher is used to help households reduce their utility bills.
This year, there will be an increase in the U-SAVE Vouchers to help families cope with their utility bills that are set to rise.
The amount will increase by $40-$120, depending on flat type.
This increase is permanent (next year, you can expect to get the same amount of U-SAVE you get this year if you are still staying in your current flat).

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The amount of rebate is as per below:

The months of rebates are as per below:









So, your household will receive the appropriate rebates during the stated months above.

PS:
1) If you own more than 1 property, you do not qualify for the U-SAVE GST Voucher.
2) If you are staying in private residences, you do not qualify for U-SAVE GST Voucher as well.

Recommended Post: Singapore Budget 2017 - GST Vouchers

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

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Singapore Budget 2017 - GST Vouchers

Announced on the 20th February 2017's Singapore Budget, Singaporeans will receive their annual GST vouchers for year 2017.
In addition to the normal GST vouchers, this year (like last year), the Government will provide a one-time Special GST Voucher - a Bonus!
You will receive a letter in July how much you will get from your GST Voucher.

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Eligibility
1) Assessable Income Earned in 2015: $28,000 and below
    Yes, your eligibility for year 2017 GST Voucher is dependent on your 2015 income.
2) Age 21 or above in year 2017
3) Singaporeans residing in Singapore

Ineligibility
1) Singaporeans owning more than 1 property in year 2017 will not get the Special GST Voucher.
2) Assessable Income Earned in 2015: more than $28,000

*you can check your home's annual value from the IRAS website.
The link and instruction is here: https://mytax.iras.gov.sg/ESVWeb/default.aspx

Recommended Post: Should You Invest in the Trump Presidency?

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Should You Invest in the Trump Presidency?

The stock market is down for the first year of a Republican President - excluding 

the first year he got re-election.

We looked back to data from ex-President George W. Bush in 2001 to 

ex-US President Dwight D. Eisenhower in 1953.

We show below the price of the S&P500 for the first year of a Republican President

Orange reflects the price at the start of the month

Blue reflects the price at the end of the month

George W. Bush 2001

George H. W. Bush 1989

Ronald Reagan 1981

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Richard Nixon 1969

Dwight D. Eisenhower 1953

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Conclusion:

1) The first year of a Republican President is bad for the stock markets,
4/5 times the market is down
2) We did some correlation analysis on Singapore STI and the US markets.
Turns out they track each other fairly closely. Down for US = down for STI

Maybe, just maybe, you might not want to hold stocks this year?

Remember to offer your opinions. If you don't put your two cents in, 

how can you expect to get change?

Have a feedback? Tell us now!

Subscribe to us or

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Stock Market's Performance in the First Year of a Republican President

The stock market is down for the first year of a Republican President - excluding 

the first year he got re-election.

We looked back to data from ex-President George W. Bush in 2001 to 

ex-US President Dwight D. Eisenhower in 1953.

We show below the price of the S&P500 for the first year of a Republican President

Orange reflects the price at the start of the month

Blue reflects the price at the end of the month

George W. Bush 2001

George H. W. Bush 1989

Ronald Reagan 1981

Recommended Post: Misconception Singaporeans have on the Re-Employment Age

Richard Nixon 1969

Dwight D. Eisenhower 1953

Recommended Post: Singapore Retirement, Re-Employment, CPF Withdrawal Age

Conclusion:

1) The first year of a Republican President is bad for the stock markets,
4/5 times the market is down
2) We did some correlation analysis on Singapore STI and the US markets.
Turns out they track each other fairly closely. Down for US = down for STI

Maybe, just maybe, you might not want to hold stocks this year?

Remember to offer your opinions. If you don't put your two cents in, 

how can you expect to get change?

Have a feedback? Tell us now!

Subscribe to us or

Follow us: Investment Stab on Facebook

Read More