Mastering Hong Kong Stock Trading Logic in One Article: From Market Rules to Investment Choices

Current Status of the Hong Kong Stock Market: Why Is It Worth Paying Attention To?

As a top global financial hub, the Hong Kong securities market’s status is undisputed. As of May 2025, the number of companies listed on the HKEX surpassed 2,620, with a total market capitalization of HKD 38 trillion, ranking among the top ten securities exchanges worldwide. Tech giants and consumer leaders such as Tencent, Alibaba, and BYD are all listed and traded on the Hong Kong stock market.

Compared to A-shares, Hong Kong stocks have unique advantages: no daily price limit, support for T+0 trading, and the allowance of short selling mechanisms. These features make Hong Kong stock trading more flexible and efficient, especially attractive to professional investors.

Hong Kong Stock Trading Rules: What You Must Know Before Entering

Trading Time in Three Phases

The HKEX trading day is divided into three sessions:

• Opening Auction (9:00-9:30): The pre-market auction phase, with the opening price determined at 9:20
• Continuous Trading (9:30-12:00, 13:00-16:00): Main trading periods throughout the day
• Closing Auction (16:00-16:10): The pre-closing auction

Each session has different buy and sell rules, requiring investors to adjust strategies flexibly according to the phase.

Core Points of the Trading System

T+0 trading is a key difference between Hong Kong stocks and A-shares. Stocks bought on the same day can be sold on the same day without restrictions on the number of trades, providing greater flexibility for short-term traders. The settlement cycle is T+2, meaning funds from a Monday sale can only be withdrawn starting Wednesday.

Volatility Adjustment Mechanism: If the Hang Seng Index or China Enterprises Index constituent stocks move more than 10% up or down within five minutes, a “cooling-off period” is triggered, during which trading is restricted within a specified price range. Normal trading resumes after five minutes.

Minimum Trading Unit is 1 lot, but the lot size varies greatly. Tencent Holdings (00700) has a lot size of 100 shares, while Jingshi Capital Group (01160) has 100,000 shares per lot. This means the entry cost for investing in Hong Kong stocks can differ significantly depending on the company.

Limit Order Rules: The HKEX requires limit orders to be within 24 points of the current stock price; some brokers may restrict this further to within 10%.

Three Main Ways to Invest in Hong Kong Stocks

Path 1: Buy individual stocks directly to enjoy company growth benefits

Hong Kong stock codes starting with 0 are five-digit numbers, divided into Main Board and Growth Enterprise Market (GEM). GEM codes start with “08” and tend to have weaker market capitalization and profitability; the Main Board hosts the most mature companies.

Currently, HKEX lists 2,626 stocks, including 2,307 on the Main Board and 319 on GEM. Beginners are advised to start with the Main Board, choosing companies with more stable business and financials.

Hong Kong stocks support short selling, with about 1,000 designated securities available for shorting, offering the opportunity to profit even when prices fall—an advantage not available in A-shares.

Path 2: Invest in indices and ETFs to reduce the risk of individual stocks

Individual stocks are volatile and risky, while index investing tends to be more stable. There are three main Hong Kong stock indices:

• Hang Seng Index (HSI): The flagship index representing Hong Kong stocks, with 83 constituent stocks, a total market cap of HKD 27 trillion, accounting for 67.92% of the total Hong Kong stock market value
• Hang Seng China Enterprises Index (HSCEI): Focuses on mainland Chinese companies
• Hang Seng Tech Index (HSTECH): Focuses on the technology sector

Investing in indices can be done via futures or ETFs. Futures require a high minimum investment (at least HKD 50,000), so most retail investors prefer ETFs. ETFs can be traded like stocks on the exchange, such as the Tracker Fund (02800) and the MSCI Hong Kong ETF (03115), both popular options tracking the Hang Seng Index.

Path 3: Contract for Difference (CFD), another leveraged trading option

CFDs are derivative instruments tracking stock prices, offering several advantages over traditional broker trading:

• Lower costs: No commission, only spreads and overnight fees
• Flexible leverage: Individual stock leverage up to 1-30x, index leverage up to 200x, far exceeding traditional 2-4x
• Zero minimum: Just need to deposit margin to trade, no need to hold full capital upfront

For example, buying one lot of Tencent (00700.HK) traditionally requires about HKD 35,000, but via CFDs, you can enter with less than HKD 40 (using low leverage). This significantly lowers the capital barrier.

However, leverage is a double-edged sword—while it amplifies gains, it also magnifies losses. Risk management is crucial.

Hong Kong Blue Chip Stock Investment Tips

The safest choice for investing in Hong Kong stocks is blue chips—large, stable, mature companies. Here are five stocks worth watching:

These companies feature large market caps, high liquidity, and stable fundamentals.

How to Start Investing in Hong Kong Stocks?

Choose the Right Trading Path

Option 1: Open an account with an overseas broker
Opening accounts with platforms like Futu or Tiger Brokers is the traditional way. Advantages include regulation and stability, but the downside is trading in HKD or USD, which involves exchange rate risk.

Option 2: Use CFD platforms supporting Hong Kong stocks
Trade directly on CFD platforms that support Hong Kong stocks. The process is usually faster, with lower capital requirements. Many platforms offer demo accounts for beginners to practice.

Preparation Before Trading

Regardless of the method chosen, complete these steps:

1. Register an account: Submit basic info and identity verification
2. Open a demo account: Practice with virtual funds before real trading
3. Deposit funds: Use supported payment methods to fund your account
4. Search for stocks: Enter stock name or code (e.g., “Tencent” or “0700”) in the platform
5. Place orders: Choose buy or sell, set quantity and risk management tools (take profit/stop loss), and submit

Risk Reminder

While Hong Kong stocks are more flexible than A-shares, they also face more challenges:

• Exchange rate risk: Trading in HKD or USD incurs currency conversion costs
• Liquidity risk: Some less-traded stocks have poor liquidity
• Leverage risk: High leverage can lead to rapid losses or margin calls
• Policy risk: Changes in policies in Hong Kong and mainland China can impact Hong Kong stocks

Before investing, develop a clear risk management plan, avoid blindly following trends, and do not over-leverage.

The core of investing in Hong Kong stocks is understanding market rules, choosing suitable investment methods, and strictly controlling risks. Whether to invest in Hong Kong stocks depends on your risk tolerance and trading style.