How does contra trading work?

Contra trading is basically buying and selling of shares. Because when you buy shares right, you don't need to make the payment until 3 days. That means on the transaction day plus 3 days later, then you can make the payment.

So the contra trading is when you buy the shares, within 3 days you sell the shares so you don't need to come up the capital for the number of shares you bought.

All you need to do is to pay the difference so let say you buy a share for $10000 and after that within 3 days, the share raise to $11000 then you sell it off within 3 days too so you make the difference of $1000.

Similarly, when you lose money, if you buy a share for $10000 and after that within 3 days, the share becomes $9000, you lost $1000. ​​​

You can contra short before XD. But you will not earn. Because if you short a CD cum dividend counter, you the shorttist will PAY the dividend amount.

If you long, you get the dividend. If you short, you pay the dividend amount to the broker. So if you think you can earn from the drop in XD, think again. And there is no guarantee that XD, the stock price drops.