After being acquired by the UK in 1997, Hong Kong and mainland China have operated on a “one country, two systems” basis. Hong Kong is called a Special Administrative Region (SAR) and it practices capitalism and is free to administer taxes, money, trade, foreign exchange, and the Hong Kong dollar, the currency.
In November 2014, Shanghai Hong Kong Stock Connect was launched, creating a cross-border channel for access to the stock market and investment. The agreement allowed investors from mainland China and Hong Kong to trade certain companies listed on each other’s stock exchanges through local brokerage firms.
Here are a few ways investors can directly or indirectly trade stocks of companies on the Hong Kong Stock Trade System are serve as multiple ways to for one to become a full-time stock trader in Hong Kong.
Find a brokerage firm
The most common way is to find a job with a brokerage firm, where you will be given trading and research duties. Alternatively, some people may become independent traders who trade their own money and do not have any employees. Large banks and brokerages offer their employees training and mentorship programs, giving you the skills you need to trade successfully.
To work as a trader in Hong Kong, you will need to pass the Securities and Futures Commission (SFC) licensing exams. The SFC is the regulator for the securities and futures industry in Hong Kong.
There are two levels of licensing exams: the representative level, which is for those who want to sell or deal in securities or futures contracts on behalf of clients, and the top level, which is for those who want to conduct business as a licensed corporation.
The exams cover topics such as the rules and regulations of the securities and futures markets, financial products and services, and investment analysis. You will also need to have a good understanding of risk management.
Once you have passed the exams and obtained your license, you will need to open a trading account with a brokerage firm. You will also be required to maintain a certain amount of money in your account, known as a margin.
Online courses can help you prepare for the licensing exams. The SFC also provides free resources, such as sample questions and past exam papers.
Several excellent online courses can teach you trading basics. These courses can be a great way to learn about different trading strategies and see what works best for you.
Many online stock market simulators allow you to practice trading without risking real money. It is a great way to test out different strategies and see what works best for you.
Numerous online forums and communities are dedicated to trading. These can be an excellent way to network with other traders and get insights into different strategies.
Trading seminars can provide valuable information about the markets and how to trade successfully. These events can also be a great way to meet other traders and learn from their experiences.
If you want to become a full-time stock trader in Hong Kong, you must pass the Securities and Futures Commission (SFC) licensing exams. The exams cover topics such as the rules and regulations of the securities and futures markets, financial products and services, and investment analysis. You will also need to have a good understanding of risk management.
Once you have passed the exams and obtained your license, you will need to open a trading account with a brokerage firm. The margin size will vary depending on the type of trade you want to make. For example, if you want to buy shares in a company listed on the Hong Kong Stock Exchange, you will need to deposit HK$100,000 in your account as a margin.
Successful full-time trader tips
1. Join an investment club
Investment clubs are a great way to learn about trading and network with other traders. Most clubs have monthly meetings where members share their latest investment ideas and strategies.
2. Get a financial advisor
A financial advisor can help you develop a trading plan and give you advice on the best stocks to trade. They can also help you stay disciplined and make wise investment decisions.
3. Read financial news and blogs
Keeping up with the latest financial news and reading trading blogs can give valuable insights into the markets. This information can help you make better investment decisions and increase your chances of success.
Direct Investment through a Broker
ETF is an indirect way to carry stocks in Hong Kong & Securities Exchange. ADRS is a direct way, but the choice is seriously limited. Investors who want to participate directly in the Hong Kong Stock Exchange must open a brokerage company and a brokerage account that offers an international trade platform.
Brokerage companies that provide international approaches generally provide many international exchange, including Hong Kong. Explore the broker before trading with them.
You are recommended to check account type (discretionary or non-random), fee structure, region and country. In the United States, the tend to look for SEC registration with membership in the Security Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA).
Notable foreign stockbrokers in the United States include Interactive Brokers, E*TRADE, Fidelity Investments, and Charles Schwab.
Use technical and fundamental analysis tools
Technical analysis tools can help you identify key market trends and make more informed trading decisions. These tools are widely available online and can be valuable for any trader.
Fundamental analysis is used to measure the intrinsic value. They can use this information to identify underrated stocks that may be ripe for investment.
The full time trading in Hong Kong stock trade practices can serve as a great alternative for investors looking to diversify their portfolio with US or European stocks. Investors are recommended to be careful when making decisions based on price fluctuations as well as company earnings and economic factors. Read more on successful traders