Contra trading adds flexibility to share trading

I REFER to the report, "Reprieve for small investors as MAS reviews 5% collateral for stock trades" by Angela Tan (BT, Sept 25).

The premise that the practice of contra is irresponsible share trading is quite unfounded. Share traders bent on stretching the settlement period, who traded shares without actual money in their pocket, are things of the past. Nowadays, contra players can easily pay for the shares they buy if they have to. They are therefore not pressurised to sell their outstanding share purchases at a loss within the settlement period.

Contra trading adds flexibility to share trading by allowing investors to sell their shares if there is a profit before the shares are due for payment, and the flexibility encourages additional market participation.