Hong Kong is one of the leading international financial centres in the world. Thousands of people trade stocks and shares here every day, making a fortune or losing everything they have in a matter of minutes.
So, how does stock trading work in Hong Kong and what are the risks?
When you buy stocks, you become a proprietor of that company. You will get a slice of the profits (or losses) when the company makes money, and you may also receive dividends if the company pays them out to shareholders. However, stock prices can go up or down, so it’s essential to do your research before buying any shares.
The price of a stock is determined by how much people are willing to pay for it. You buy it at the current market price when you purchase a stock. If someone else wants to sell the same stock to you, they will get whatever price you’re willing to pay.
Brokers or Exchange
There are two ways to trade stocks in Hong Kong: through a broker or exchange.
Now, when you want to buy or sell stocks in Hong Kong, you’ll need to do so through a broker. There are several different brokers that you can choose from, but it’s essential to make sure that you choose a reputable one.
Brokers will purchase and sell stocks for you, but they usually charge a commission. On the other hand, exchanges are like markets where people can trade stocks. The Hong Kong Stock Exchange (SEHK) is the largest in Asia and the sixth-largest globally.
Once you’ve found a broker that you’re happy with, you’ll need to open an account with them. It is where you’ll deposit the money that you want to use to buy or sell stocks.
Mainboard and GEM
It’s essential to understand that there are two types of stock markets in Hong Kong: the Main Board and the GEM Board.
The Main Board is where you’ll find the stocks of large, well-established companies. On the other hand, the GEM Board is where you’ll find stocks of smaller, up-and-coming companies.
Then you need to be aware of the risks involved in stock trading. If the stock market crashes, you could lose all your money very quickly.
Now, when it comes to purchasing or selling stocks, there are two ways that you can do this: online or offline.
If you want to trade stocks online, you’ll need to use a stock trading platform. There are several different platforms that you can choose from, but it’s essential to make sure that you choose one that’s easy to use and that offers good value for money.
If you want to trade stocks offline, you’ll need to use a broker. Go to the broker’s office, or you can use the phone.
Please remember that stock trading is a risky business, and you can lose money and make money. So it’s essential to understand what you’re doing before you start trading.
Also, remember the Hong Kong stock market is open from 9 am to 5 pm Monday through Friday. There are two ways to trade stocks on the SEHK: limit order and market order. You designate the maximum price you’re willing to pay for a stock with a limit order.
If someone is willing to sell you the stock at that price or lower, they will fill your order. With a market order, you tell your broker to buy or sell a stock at whatever price is currently being offered in the market.
Ask for Advice
If you’re not sure about something, it’s always best to ask a professional for advice. So that’s how stock trading works in Hong Kong. It’s a complex process, but if you understand it, then you can make a lot of money.
Just remember to be careful and always seek professional advice if you’re not sure about something.
Take a look at Saxo to learn more.