Hong Kong Stock Exchange
These days a lot of people are interested in investing in China. This really should come as no surprise with its booming economy and its massive population. In most cases the easiest way to invest in China is on the Hong Kong Stock Exchange. This is actually one of the oldest stock exchanges in Europe; it is also now the second largest exchange in the region. However it will very likely be number one soon.
Although a lot of people are just now recognizing the rapid growth of China the Hong Kong Stock Exchange has been around for more than a century. It has always been an important part of finance in the region but with the return of Hong Kong to China it has taken on a new importance. This is because companies from China are now being listed on the exchange as the government relaxes policies on private ownership. With investors from all around the world looking to get in on the growth of China it is no surprise that the Hong Kong Stock Exchange has attracted a lot of interest.
The Hong Kong Stock exchange uses a mixed system for placing orders. Most transactions are still made by brokers trading with each other on the floor. However a computerized automated trading system has also been added. This makes it a lot easier for people to make trades; it also brings the cost of commissions down. Despite this most trades are still done the old fashioned way between brokers and a seat on the exchange is still a highly valued and very expensive commodity.
Although the Hong Kong Stock Exchange basically works the same as other stock exchange there are a few differences that you should be aware of if you are planning to trade on it. The biggest is that the prices of the stocks tend to be very low. On most stock exchanges a stock with a price that is less than five dollars a share would normally be considered something of a risky investment as normally indicates a lack of stability. This is not the case with the Hong Kong Stock Exchange. In this case stocks with very low prices are common and most people are quite comfortable with buying them, they represent some of the largest companies on the exchange.
The other big difference is that stocks are normally sold in lots of pre-set sizes. You can get odd lot orders if you want but these will actually be filled in a separate market. There are also rules on limit orders; they have to be within twenty four ticks of the current price. This can change the way that you would normally place orders so you need to be aware of this difference. It actually greatly limits the flexibility that you have with limit orders but it does greatly increase the likelihood of getting your order filled.