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Since Tiger Brokers disrupted Singapore’s investing landscape with ultra-low-cost brokerage commissions in early 2020, it has continued to launch new and innovative products regularly.
One of its latest investment solutions for Singapore investors is the Cash Boost Account (CBA) – making it the first Fintech broker in Singapore to offer contra trading – which allows you to start trading without any upfront capital.
How Does Contra Trading Work?
Contra trading enables investors to buy and sell securities in the short term, typically just a few days, without having to settle their trades. This means you don’t have to stump up any upfront capital to start trading stocks.
When you trade via the Cash Boost Account, stocks purchased on T+ 0 day using your trading limit can be sold any time before or on Forced Selling Date itself. If the difference is positive, you can keep it as profit. If you make a loss, simply make a payment into your Cash Boost Account. You can enjoy the flexibility of interest-free period until T+6 day for SG & HK markets and T+5 for the US market on your losses*.
If you wish to keep the stocks, you can simply top up the full amount for the purchase before the Forced Selling Date to settle the payment.
All screengrabs are from Tiger Brokers’ website
Investors can open your Tiger Brokers’ Cash Boost Account in less than 3 minutes and start trading right away with a credit limit of $20,000 upon approval.
As you may be able to guess, contra trading is not just reserved for Singapore securities, but you can also complete contra trades for securities listed in the United States and Hong Kong with Tiger Brokers’ Cash Boost Account.
You can also apply to increase the default $20,000 trading limit on the Tiger Brokers mobile trading app. Simply apply via Singpass or manually – and your credit limit will be assessed using your annual income and the size of your existing assets among other factors.
Read Also: What Is Contra Trading, The Risk Involved, And Why Some Investors Find It Attractive
Flexibility To Profit From Both Long-Term And Short-Term Positions
Regular traders can use the Cash Boost Account to make short-term trades without having to put up a significant upfront capital nor fork out a hefty interest payment to hold their positions. While the intention is to allow flexibility in your investment decision, this can boost your overall returns as well.
For example, if you spot an opportunity to buy a stock at a good price, but do not have the cash upfront to pay for the investment, you can use the Cash Boost Account to make the trade first.
If you wish to take profit from the trade, you can simply sell the investment by the Forced Selling Date (i.e. T+4 for SG and HK markets, and T+3 for US market) and realise short-term gains or losses. If you make a loss, the Cash Boost Account offers you an interest-free period up till T+6 for SG and HK markets (and T+5 for the US market) to make payment.
But, investors don’t just get to enjoy potential returns in the short-term by tapping on Tiger Brokers’ Cash Boost Account. If you decide to keep the investment for the long-term, you can also transfer funds into your Cash Boost Account to settle the trade by the Forced Selling Date or T+4 for SG and HK markets and T+3 for the US market.
Even if you had always wanted to keep your investment for the long-term, Tiger Brokers’ Cash Boost Account gives you the luxury of interest-free credit up till the Forced Selling Date. All the while, you can continue to enjoy earning returns on your cash during the same period. You can even keep your funds in a highly liquid cash management account such as Tiger Vault and simply transfer the funds to your Cash Boost Account before the Forced Selling Date.
Attractive Brokerage Commission Structure To Maximise Returns
On top of offering $0 cash upfront trading and an interest-free holding period, the brokerage fee structure on Tiger Brokers’ Cash Boost Account is also attractive.
When buying SGX securities, investors have to pay 0.12% or a minimum of $5 in brokerage fees*. This is significantly lower than the typical fee of 0.28% or a minimum of $25 which is currently offered by many other brokerages in Singapore.
In this example, buying $5,000 worth of stocks will cost us $6 on Tiger Brokers’ Cash Boost Account – compared to the minimum $25 we would have to pay with other brokerages. Similarly, buying $10,000 worth of stocks will cost us $12 on the Cash Boost Account – rather than $28 on other brokerages.
Over time, this can add up to significant savings for regular traders, especially if we consider the fact that we have to make two trades – both buy and sell – each time to realise our profits or losses.
With Tiger Brokers’ Cash Boost Account, we only have to overcome a cost of $24 ($12 when we buy and $12 when we sell) on a $10,000 position. If we invest via another broker in Singapore, we instead have a minimum cost of $56 to overcome before we can earn a profit.
CDP Linkage To Your Cash Boost Account – Enabling Lower Commissions When Selling SGX Stocks Held In Your CDP
For investors who hold SGX stocks in your Central Depository (CDP) account, you may realise that selling them will also mean incurring a similar fee structure, typically 0.28% of the trade value or a minimum of $25 per trade.
You also cannot enjoy the low brokerage commissions that Fintech brokers in Singapore offer – as your stocks are held in your CDP account rather than custodised with the Fintech broker. The only other option is to transfer these securities from your CDP account to the Fintech broker of your choice.
Tiger Brokers has done away with this extra hassle – becoming the first Fintech broker with an option to link our CDP Securities Account to our Cash Boost Account, Now, we can start selling our SGX counters at the same attractive brokerage commission – at 0.12% of the trade value or minimum $5 per trade.
You simply have to follow these 5 easy steps, which can be completed in under a minute:
Lucrative Rewards When You Trade With Tiger Brokers Cash Boost Account
In celebration of Singapore’s 59th birthday, Tiger Brokers is offering $0 commission for SGX market for both Prime & Cash Boost Account till 31 October 2024.
On top of this, stand to win lucrative prizes when you Trade Now, Settle Later with Tiger Brokers’ Cash Boost Account, ranging up to 20 Nvidia shares worth US$2,095!
You can earn a maximum of 12 lucky draw chances and a 90-day commission-free trading when you open a Cash Boost Account and link with your CDP account:
You also stand to earn 8 more lucky draw chances when you trade via the Cash Boost Account:
Click HERE to open your Cash Boost Account today!
Read Also: Step-By-Step Guide To Opening An Account With Tiger Brokers Singapore
The post CDP Linkage On Tiger Brokers’ Cash Boost Account: How Investors Can Enjoy One Of The Cheapest & Fastest Ways To Trade SGX Stocks And Contra Trade appeared first on DollarsAndSense.sg.
