Resources
FAQ (MCA Settlement)
Trade Related
Foreign Market Net and Contra Settlement FAQ
    Resources
    FAQ (MCA Settlement)
    Trade Related
    Foreign Market Net and Contra Settlement FAQ

    How does the foreign market Net and Contra settlement work?
    All foreign trades will automatically be settled using Net or Contra if there are buy and sell trades of the same stock. Trades of the same stock will be automatically offset. You will either receive profits made from the trades or pay for the losses incurred. Please refer to the illustrations below.
    What are the benefits of trade settlement using Net and Contra (applicable to foreign trades only)?
    • Higher efficiency and more timely settlement of contracts

    2 or more contracts of the same counter can be settled using Net or Contra.

     

    • Lower upfront investment

    If you made a buy and sell trade of the same stock on the same day, you will only be required to settle the difference in amount of your outstanding trades. 

     

    e.g.

    Outstanding buy contract value of AAPL: USD 500

    Outstanding sell contract value of AAPL: USD 1000

    Receive sales proceed of USD 500 credited into MCA on settlement date
    How do I view the outstanding amount of my trades?
    To view your outstanding contra amount, please log in to the online trading platform > Outstanding contracts > Contra/Setoff/Netoff section
    Can my foreign trades of different counters be settled using Net or Contra?
    No. Net or contra settlement for foreign market applies to single counter only. What this means is only buy and sell trades for the same counter can be settled using the Net or Contra settlement process. An SMS will be sent if the deduction for your foreign contra loss amount is not successful. Please ensure you maintain sufficient funds in your MCA on settlement date.
    Can my Cash Upfront buy trades be settled using the Net or Contra settlement?
    No. Cash upfront trades cannot be settled using Net or Contra. This settlement process is only applicable to trades placed using Cash settlement mode.
    If I buy 100 AAPL on T date and sell 100 AAPL on T+1, will my trades be settled using Net or Contra?

    It depends. If on T+2 there are sufficient funds in your MCA to settle the buy 100 AAPL trade, your buy trade will be settled on T+2 and your sales proceeds for sell 100 AAPL will be credited on T+3.

     

    However, if there are insufficient funds in your MCA to settle the buy trade on T+2, your buy and sell trade will be settled using the Net or Contra settlement process on T+3.

    I bought the same counter over a few days. Why are all my buy trades not settled?
    Please ensure you have sufficient funds in your MCA on settlement date. If there are insufficient funds to settle your first buy trade, the remaining buy trades will remain outstanding.  You may receive more than one SMS on the failed deduction of your buy trades.