How to conduct gray market trading on the Rich List-FTFT International Securities and Futures Official Website - Hong Kong Stock Account Opening

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How to conduct gray market trading on the Rich List

How to conduct gray market trading on the Rich List

1. What is a gray market?
The gray market refers to the over-the-counter trading market. Hong Kong stock trading is generally matched through the Hong Kong Stock Exchange system during trading hours, but gray market trading is not matched through the exchange system, but through internal systems provided by certain large securities firms for quotation matching. In Hong Kong, it is generally used for pre listing trading of new stocks, which takes place one trading day before the new stock is listed and after the close of trading.

2.When will gray market trading be conducted?
The trading hours are from 16:15 to 18:30 on the trading day before the official listing of the new stock
If it is a half day trading day, the trading hours are from 14:15 to 16:30
Transaction arrangement during typhoon and black rainstorm:
Typhoon signal No. 8 or above/black rainstorm warning:
(1) Clear signal/warning before 12:00 noon: gray market trading will start as usual at 4:15 pm (2:15 pm for half day trading).
(2) The signal/warning will be lifted after 12:00 noon: trading will be suspended for the entire day.
(3) Signal/warning issued during gray market trading hours: gray market trading will continue as usual until 6:30 pm (4:30 pm for half day trading)

3.How to conduct electronic gray market trading on the APP?

(1) Log in to the APP, click on [Market] - [Market] - [Hong Kong Stock] - [New Stock Center], and in the waiting list (gray market) of the new stock center, from 16:15 to 18:30 on the trading day before the new stock is officially listed, the top right corner of the waiting list will display "gray market trading", indicating that the new stock can be traded in the gray market.

(2) Click on the new stock list to enter the details page of the individual stock gray market. Click the "Trade" button at the bottom of the page to enter the trading page.

(3) The default order type on the trading page is "gray limit order". Enter the price and quantity to place the order.

4.Precautions for gray market trading

(1)Gray market trading uses gray market limit orders, where only gray market stocks are displayed on the tradable day, and other non gray market stocks hide this order type;

(2) The price range that can be entered for gray limit orders is as follows:

Buy: [current price -50 * minimum price, current price+5 * minimum price]

Sell order: [current price -5 * minimum price, current price+50 * minimum price]

If the order is paid, if it is higher than level 5 but lower than level 50, the order will be invalidated;

If the sales order is higher than 50 levels and lower than 5 levels, the order will be invalidated.

(3) gray market trading cannot change orders. If you need to change an order, you can cancel it first and then place an order;

(4) If the listing date of a new stock is postponed, cancelled, or the listing conditions are changed, the notice from the Rich List shall prevail.
(5) Not all new stocks have gray market trading. Usually, only public offerings and listings are available, and there is no hidden trading in both placement listings and introduction listings. Popular new stocks with good market response and high subscription multiples also have higher gray market transaction rates.

5.The relationship between gray market price and listing price
The rise and fall performance of the gray market, to a certain extent, reflects the popularity of the new stock. The gray market does not fully reflect the market's enthusiasm for the new stock, because the gray market performance only reflects the buying and selling performance of the new stock at the securities firm, and does not fully reflect market demand. Therefore, the gray market price should not be regarded as an important indicator of the trend of the new stock.

6.The benefits of gray trading
(1) Buy first
Some investors may participate in the IPO, but may not win the lottery. They can buy new shares in advance through gray market trading before going public.
(2) Lock in profits
If the gray side of the new stock performs well, you can sell the winning stocks in advance to lock in profits
(3) Timely stop loss
If the gray market performance of new stocks is not satisfactory, you can sell the winning stocks in advance and stop losses in a timely manner
(4) Reference basis
The performance of the gray market can provide reference for the trend after listing