To trade stocks in Hong Kong, you must first obtain a license from the Securities and Futures Commission (SFC). You can apply for a license by completing an application form and submitting it to the SFC.
There are various licences, and the requirements vary depending on the type of license you are applying for. For example, if you wish to trade futures contracts, you must have a Futures Trading License. Alternatively, if you only wish to trade stocks, you will need a Stock Trading License.
Once you have been granted a license, you will open a trading account with a stock broker. Brokers are licensed by the SFC and must adhere to strict rules and regulations. Choosing a reputable broker who will offer you good trading conditions and prices is essential.
Important information to remember
When trading stocks in Hong Kong, you must never forget the following.
- The stock market can be unpredictable and highly volatile at times. It is essential only to invest money you can afford to lose.
- You must always do proper research before buying or selling stocks. Several resources are available online, such as financial news websites and investment forums, which can help you make informed decisions.
- You need to understand the risks involved in stock trading and never trade on margin if you are not fully informed of all the risks
- Always consult with a professional financial advisor if you are unsure about any aspect of stock trading. Many advisors offer free consultations.
- You can use a knowledgeable brokerage to buy and sell stocks or an automated online trading platform.
- When buying stocks, you will need to pay a brokerage fee and a transaction fee. These fees can vary depending on the broker and the type of trade.
- It is essential to understand the difference between buying and selling shares short, which can significantly impact your profit or loss.
- Several different types of securities are traded on the Hong Kong stock market, including stocks, bonds, and exchange-traded funds (ETFs).
- If you are looking to invest in Hong Kong-listed companies, it is essential to be aware of the different listing requirements for each exchange.
- The Hong Kong stock market is volatile, and prices can move up or down rapidly. It is essential to have a risk management strategy in place before investing.
- There are tested ways to measure the performance of the Hong Kong stock market, including the Hang Seng Index (HSI) and the Hang Seng China Enterprises Index (HSCEI).
- The HSI measures the performance of large companies, while the HSCEI tracks the performance of small and medium-sized businesses.
- Several different factors can affect the performance of the Hong Kong stock market, including political stability, economic growth, and interest rates.
The Hang Seng
The Hang Seng is a market capitalization-weighted index. The floats of each company’s shares are adjusted to allow for different circumstances, such as when companies do share buybacks.
The Stock Exchange of Hong Kong Limited (SEHK, 港交所), also known as HKEx, is located in Hong Kong with almost 2,500 listed companies. The SEHK is the world’s ninth-largest stock exchange by market capitalization and the third largest in Asia, behind only the Tokyo Stock Exchange and Shanghai Stock Exchange.
HSBC Holdings plc (HSBA) is a British multinational banking and financial services holding company headquartered in London, United Kingdom. It is the world’s seventh-largest bank by total assets and the largest in Europe, with total assets of US$2.374 trillion (as of December 2016).
Bank of China Limited (BOC) (SEHK: 3988) is one of China’s big four state-owned commercial banks. It was initiated in 1912 by the Republican government to restore the Imperial Bank of China.
It is now the second-largest lender in China after the Industrial and Commercial Bank of China. As of 31 December 2015, it has the fourth-largest number of ATMs with over 95,000 machines installed.
It is one of four note-issuing banks in mainland China, and its notes are issued under the authority of the Central Bank of China. For any additional information, check out this website for stocks in Hong Kong.