Hi guys,
I have a general question about contra settlement investing.
As per this - https://www.commsec.com.au/education/learn/managing-investments/what-is-contra-settlement.html
I can buy and get out of a stock within the same day and only be credited or debited the difference.
Aside from the obvious risk, can anyone tell me why it would be a bad idea to invest in more than you actually own but get it out same day possibly making more money?
For example, if I only own $4000. I invest 50k into a stock, it rises by 2% and I pull out and only need to worry about getting that 1k back to me. Therefore profiting off of 50k despite not actually having that sort of money.
Is this something that is commonly done?
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