Securities Trading Investment Guide: Basic Trading Knowledge

1.Entrusted transaction

Trading variety

Common stocks(A-shares,B-shares),funds,bonds,bond repurchases,warrants,and other trading varieties approved by the China Securities Regulatory Commission.

Stocks are a type of securities issued by a limited liability company as evidence of the shares held by shareholders.

The Investment fund,referred to as the fund,is a collective securities investment method of sharing interests and risks,that is,through the issuance of fund units,the funds of investors are concentrated,which are managed and used by the fund manager,and are entrusted by the fund custodian to invest in financial instruments such as stocks and bonds.

Bonds are debt certificates issued by governments,financial institutions,industrial and commercial enterprises,and other institutions directly borrowing from society to raise funds,and promising to pay interest at a certain rate and repay the principal according to agreed conditions.

Bond repurchase transaction refers to the act of both buyers and sellers of bonds agreeing to engage in reverse trading at a certain price at a certain time in the future while completing the transaction.

A warrant is a type of certificate of rights that stipulates that the holder has the right(rather than the obligation)to purchase or sell the underlying securities from the issuer at the agreed price during a certain period,or to collect settlement differences through cash settlement or other means.

Transaction time

Every Monday to Friday,excluding national statutory holidays and closed days announced by the exchange.

From 9:15 to 9:25 on each trading day,it is the opening call auction time.

The continuous bidding time is from 9:30 to 11:30 and from 13:00 to 15:00 on each trading day of the Shanghai Stock Exchange.The continuous bidding time is from 9:30 to 11:30 and from 13:00 to 14:57 on each trading day of the Shenzhen Stock Exchange,and the closing call bidding time is from 14:57 to 15:00.

Trading unit

The declared number of stocks,funds and warrants shall be 100 shares(shares)or integral multiples thereof.When selling stocks,funds and warrants,the balance of which is less than 100 shares(shares)shall be reported for sale at one time.

The declared quantity for bond trading on the Shanghai Stock Exchange is one bond or its integer multiple,with one bond with a face value of RMB 1000.

The declared quantity for bond trading on the Shenzhen Stock Exchange is 10 or an integer multiple of it.When selling bonds,if the balance is less than 10 pieces,a one-time declaration for sale should be made.The bond is issued with a face value of 100 RMB per bond.

Minimum change unit of declared price

RMB 0.01 for A-shares and bonds;The funds and warrants are RMB 0.001;The Shanghai B-share price is 0.001 US dollars,while the Shenzhen B-share price is 0.01 Hong Kong dollars.

Upper limit of single declaration

Declaration limit:The maximum number of stocks(funds)that can be declared in a single transaction should be less than 1 million shares(shares),the maximum number of bonds that can be declared in a single transaction should be less than 10000 shares(including 10000 shares),and the maximum number of bonds that can be bought out for repurchase transactions should not exceed 50000 shares.The exchange can adjust the maximum number of single declarations for different types or circulation volumes as needed.

T+1 transaction and T+0 reversal transaction

"T"refers to the"trading day of the day",and"T+1"refers to the first trading day after the"trading day of the day".

At present,the clearing and settlement system of Shanghai and Shenzhen A-shares adopts the"T+1"method,and investors cannot sell the stocks they buy on the same day.In terms of fund utilization,the funds obtained from selling stocks on the same day can be used to buy stocks,but the withdrawal of cash takes place the next day.

Reversal trading of securities refers to the complete or partial sale of securities purchased by investors after confirmation of transaction,before settlement and settlement.

Currently,B-shares are subject to"T+3"clearing and settlement and"T+1"swing trading,and can only be sold days after the stock is purchased.

Bonds and warrants are subject to"T+0"reverse trading,meaning that bonds and warrants purchased can be sold on the same day.

The difference between market price commission and limit price commission

Entrustment can buy and sell securities through two methods:limit price entrustment or market price entrustment.

Price limit commission refers to a client entrusting a securities company to buy and sell securities at a limited price,and the securities company must declare to buy securities at or below the limited price;Declare the sale of securities at a limited price or above the limit.

Market price commission refers to a client entrusting a securities company to buy and sell securities at market prices.

The principle of"price first,time first"bidding transaction

Securities bidding transactions are matched based on the principle of price priority and time priority.Among the two priorities,price takes precedence over time.

The principle of price priority is:buying orders at higher prices have priority over buying orders at lower prices,and selling orders at lower prices have priority over selling orders at higher prices.

The principle of time priority is:for both buyers and sellers with the same price,the first to declare shall have priority over the second to declare.The order is determined by the time when the trading host accepts the declaration.

Principles for determining transaction through collective bidding

The principle of transaction price for collective bidding is:

①The price that can achieve maximum trading volume;

②The price at which all buying orders above this price and selling orders below this price are traded;

③The price at which at least one buyer or seller with the same price has completed all transactions.

If two or more declared prices meet the above conditions,the declared price with the smallest outstanding volume shall be the transaction price;If there are still two or more declared prices that meet the above conditions for minimizing the outstanding volume,the intermediate price is the transaction price.

All transactions in collective bidding are executed at the same price.

Transactions that have not been completed during the collective bidding period will automatically enter continuous bidding.

Principles for determining bidding transactions

The principle of authenticity of the transaction price during continuous bidding is:

①The highest buying declared price is the same as the lowest selling declared price,and this price is the transaction price.

②If the buying declaration price is higher than the real-time minimum selling declaration price,the transaction price shall be the real-time minimum selling declaration price.

③If the selling declaration price is lower than the immediately disclosed highest buying declaration price,the transaction price shall be the immediately disclosed highest buying declaration price.

Relevant regulations on entrusted cancellation

After the commission,the outstanding portion can be revoked.The revoked or invalid entrustment shall be immediately returned to the corresponding funds or securities upon confirmation by the exchange host.

Please note that cancellation of orders is allowed during the 9:15 to 9:20 opening call bidding stage of the Shanghai Stock Exchange;9:Cancellation is not allowed between stages 20 and 9:25.Cancellation of orders is not allowed on the Shenzhen Stock Exchange from 9:20 to 9:25,and from 14:57 to 15:00.

In addition,the subscription of new shares cannot be cancelled.

Several Methods of Entrusted Trading

There are usually four ways:

①Fill out the buy or sell order form at the counter of the sales department and entrust it manually;

②Call the securities company's entrusted phone number for self-service telephone entrustment;

③Entrust through self-service keyboard terminals in the sales department;

④Entrust through online trading systems.

Entrusted transaction inquiry

You can conduct transaction inquiries through telephone entrustment,online transactions,and the query function of the self-service keyboard terminal system in the sales department.You can also print the delivery order at the sales department on the day after the entrustment.

What situations can lead to non transaction of the commission?

①Has the investor's commission entered the trading host of the stock exchange?If an investor fills in an invalid commission,it will be rejected by the exchange's trading host,or due to other reasons,the investor's commission does not enter the exchange's trading host,and the commission cannot be completed.

②When investors declare,the entrusted price may refer to the price displayed in the trading market at that time,but due to the time delay effect of market transmission,there is a time difference between the buying and selling declaration situation in the exchange trading host and the market display.When an investor's commission is reported to the exchange's trading host,the latest matching price may have changed,or it may result in the investor's commission being unable to be traded.

③During the declaration period,there was no declaration quantity that matched the investor's commission.

2.Price fluctuation limit

Limits on the fluctuation of securities varieties

The trading of stocks,funds and warrants shall be subject to price limits.

Formula for calculating price fluctuations

The formula for calculating the price of stocks and funds is:

The price of the increase or decrease is equal to the previous closing price*(1±the proportion of the increase or decrease),and the calculation result is rounded to the smallest unit of price change.

The increase price of the warrant=the closing price of the previous day of the warrant+(the increase price of the underlying security on the same day-the closing price of the underlying security on the previous day)*125%*the exercise ratio;

The decline price of the warrant=the closing price of the previous day of the warrant-(the closing price of the underlying security on the previous day-the decline price of the underlying security on the same day)*125%*the exercise ratio.When the calculation result is less than or equal to zero,the decline price of the warrant is zero.

The situation where there is no price limit on the first trading day

If one of the following situations occurs,there is no price increase or decrease limit on the first trading day:

①IPO stocks and Closed-end fund;

②Additional issuance of listed stocks;

③Stocks that have resumed listing after suspension of listing;

④Other situations recognized by the exchange.

Regulations of the Shanghai Stock Exchange on Collective Auction and Continuous Auction for Securities with No Price Limits on Purchase and Sale

The effective declared price during the stage of collective bidding shall comply with the following provisions:

①The declared price for stock trading shall not be higher than 900%of the previous closing price and shall not be lower than 50%of the previous closing price

②The maximum declared price for fund and debt trading shall not be higher than 150%of the previous closing price,and shall not be lower than 70%of the previous closing price.

The effective declared price during the continuous bidding stage shall comply with the following provisions:

①The declared price shall not be higher than 110%of the lowest selling price immediately disclosed and shall not be lower than 90%of the highest buying price immediately disclosed;At the same time,it shall not exceed 130%of the average of the highest and lowest bid prices mentioned above,and shall not be less than 70%of the average.

②If there is no declared buying price in the real-time disclosure,the lower of the lowest selling price or the latest transaction price in the real-time disclosure shall be considered as the highest buying price in the preceding item;

③If there is no declared selling price in the instant disclosure,the higher of the highest buying price or the latest transaction price in the instant disclosure shall be considered as the lowest selling price in the preceding paragraph.

If there is no trading on that day,the previous closing price shall be considered as the latest trading price.

3.Issues of suspension and abnormal fluctuations in stock trading

Reasons for stock suspension

Generally speaking,there are three reasons for suspension:

①The listed company has important information disclosed;

②The securities regulatory authorities believe that listed companies need to provide explanations or clarifications regarding major events or rumors;

③When a listed company needs to conduct an investigation due to suspicion.The duration of the suspension depends on the specific situation.

Abnormal fluctuations in securities bidding transactions

If there are any of the following abnormal fluctuations in securities bidding trading,the Shanghai Stock Exchange may temporarily suspend trading during the trading session according to market needs:

①The intraday trading price of stocks without price limit increases or decreases by more than 30%,accumulatively increases by more than 100%,or accumulatively decreases by more than 50%compared to the opening price of the day;

②Within two months prior to the expiration date,if the market price is significantly higher than the theoretical price and the previous closing price is above 0.100 yuan(including 0.100 yuan),the intraday trading price of the warrant has increased by more than 20%for the first time compared to the opening price of the day,and the cumulative increase has exceeded 50%;

③Within two months prior to the expiration date,if the market price is significantly higher than the theoretical price and the previous closing price is below 0.100 yuan(excluding 0.100 yuan),and the intraday trading price has increased by more than 50%for the first time compared to the opening price of the day,and the cumulative increase has exceeded 80%;

④Suspected of illegal and irregular behavior in bidding transactions,which may have a serious impact on transaction prices or seriously mislead other investors;

⑤Other situations where the China Securities Regulatory Commission or the Shanghai Stock Exchange deems it possible to temporarily suspend trading during the trading session.

Time standard for temporary intraday suspension

According to the"Real time Monitoring Guidelines for Abnormal Securities Trading on the China Stock Exchange",the temporary suspension time during the trading session shall be executed according to the following standards:

①The duration of the temporary suspension of trading of warrants during the first intraday trading is 60 minutes;

②The duration of temporary suspension of trading for other securities during the first intraday trading is 30 minutes;

③If the first suspension of trading exceeds the closing time,trading shall resume five minutes before the close of the day;

④The temporary suspension of trading during the second session lasts until five minutes before the close of the day.

Regulatory measures for abnormal trading behavior

According to the Guidelines of Shanghai Stock Exchange on Real time Monitoring of Abnormal Securities Transactions,if one of the following abnormal transactions occurs in securities transactions,SSE may issue a written warning to the relevant account holders or directly take measures to restrict transactions:

①The securities account holding the stock shares of the company that have been lifted from restrictions on sale sells more than 1%of the total number of shares of the company through the bidding system within one month;

②The same account conducts intraday trading of a single security at the same price level and the cumulative quantity is relatively large;

③If the same account has more than 5 intraday transactions and the cumulative quantity is relatively large;

④Seriously affecting the price of securities trading through multiple large and continuous transactions;

⑤Seriously affecting the trading price or misleading other investors through continuous large declaration without the purpose of transaction;

⑥Other situations where the China Securities Regulatory Commission or the Shanghai Stock Exchange deems it possible to implement written warnings and restrict trading.

Methods of restricting securities account transactions

Restricting securities account transactions includes the following methods:

①Restricting the purchase of designated securities or all trading varieties;

②Restricting the sale of designated securities or all trading varieties;

③Restrict the purchase and sale of designated securities or all trading varieties.

4.Securities trading fees

Transaction Fee Statement for A and B Shares on the Shanghai and Shenzhen Stock Exchanges

Fee Name

Shanghai A-share

Shenzhen A-share

Shanghai B-share

Shenzhen B-share

stamp duty

3‰of the transaction amount

commission

Not exceeding 3‰of the transaction amount,starting at 5 yuan

Not exceeding 3‰of the transaction amount,starting at 1 USD

Not exceeding 3‰of the transaction amount,starting at HKD 5

Transfer fee

1‰of the transaction face value,starting at 1 yuan

Settlement fee

0.5‰of the transaction amount

0.5‰of the transaction amount,with a maximum limit of HKD 500

Shanghai and Shenzhen Stock Exchange Closed-end fund,ETF,Warrant and Bond Transaction Fee Statement

Fee Name

Closed-end fund,ETF and warrant of Shanghai Stock Exchange

Shenzhen Stock Exchange funds and warrants

Treasury bond,corporate bonds and Convertible bond of Shanghai Stock Exchange

Treasury bond,corporate bonds and convertible bonds of Shenzhen Stock Exchange

commission

Not exceeding 3‰of the transaction amount,starting at 5 yuan

Not exceeding 1‰of the transaction amount,starting at 5 yuan

Not exceeding 1‰of the transaction amount

5.Dividend distribution

Receive bonus shares and dividends

Before profit distribution,listed companies shall disclose the distribution announcement in the designated newspapers and periodicals such as China Securities Journal,Shanghai Securities Journal,Securities Times and the websites of Shanghai and Shenzhen Stock Exchanges as required,and determine the equity registration date(R day),ex right and ex dividend date(usually R+1 day),bonus share listing date(generally R+2 days for Shanghai Stock Exchange,R+1 days for Shenzhen Stock Exchange)and dividend payment date(generally R+1 day for Shenzhen Stock Exchange).Investors who hold or purchase A-shares on the equity registration date can enjoy this dividend.The first trading day after the equity registration date is the ex dividend day,and investors who purchase stocks on this day do not enjoy this dividend right.

Red shares and dividends will be automatically transferred to investors'securities account cards and fund accounts,and Shanghai investors must complete designated transactions before they can receive them.Investors are advised to pay attention to the announcement of the listed company on the date of receipt of bonus shares and dividends.

Calculation of ex right and ex dividend prices

The formula for calculating the ex right and ex dividend reference price of listed securities on the next trading day after the equity registration date(B shares are the last trading day)in the event of equity distribution,transfer of capital stock from provident fund,or allotment of shares is as follows:

Ex right(ex dividend)reference price=[(previous closing price-cash dividend)+allotment(new)share price*change ratio of tradable shares]/(1+change ratio of tradable shares).

The previous closing price of the security displayed in the real-time market on the day of ex-right and ex-dividend is the reference price for ex-right and ex-dividend.

6.Block trade

Amount and quantity of Block trade

Block trade can be adopted if the securities trading conducted in Shanghai Stock Exchange meets the following conditions:

①The declared quantity of a single transaction of A-shares should not be less than 500000 shares,or the transaction amount should not be less than 3 million RMB;

②The declared quantity of a single transaction of B-shares shall not be less than 500000 shares,or the transaction amount shall not be less than 300000 US dollars;

③The number of single transaction orders of fund Block trade shall not be less than 3 million,or the transaction amount shall not be less than 3 million yuan;

④The declared quantity of a single transaction of treasury bond and bond repo Block trade should not be less than 10000,or the transaction amount should not be less than 10 million yuan;

⑤The declared quantity for a single transaction of other bonds should not be less than 1000 lots,or the transaction amount should not be less than 1 million yuan.

The SSE may adjust the minimum limit of Block trade according to market conditions.

Ways to participate in Block trade

Institutions with special seats in Shanghai Stock Exchange can conduct Block trade through this seat.When other investors conduct Block trade,they shall entrust the members of the Shanghai Stock Exchange who handle the designated transactions.

Trading time of Block trade

The trading time of Block trade is 15:00-15:30 on the trading day of the SSE,and the SSE accepts the declaration of Block trade within the above time.Users of Block trade can log on to the Block trade electronic system of Shanghai Stock Exchange at 14:30-15:00 on the trading day to make preparations before the start;Users of Block trade can query the situation of Block trade of the day or accept the transaction data of the day through the Block trade electronic system of Shanghai Stock Exchange at 15:30-16:00 on the trading day.

Securities that cannot be Block trade

The SSE will not accept the declaration of Block trade for the securities that are still suspended before 15:00.

7.Trading behavior supervision

Behavior to be monitored with emphasis

The Shanghai Stock Exchange will focus on monitoring the following abnormal trading behaviors that may affect securities trading prices or volume:

(1)Before the disclosure of information that may have a significant impact on the price of securities trading,buy or sell a large amount of relevant securities;

(2)Large or frequent transactions between accounts opened with the same identity document,business license,or other valid supporting documents that are counterparties to each other;

(3)Entrusting or authorizing securities accounts engaged in transactions on behalf of the same institution or individual to engage in a large or frequent amount of transactions with each other as counterparties;

(4)Large or frequent transactions between two or more fixed or suspected related securities accounts that are counterparties to each other;

(5)Large declaration,continuous declaration,or intensive declaration to affect securities trading prices;

(6)Frequent declaration or revocation of declarations to affect securities trading prices or other investors'investment decisions;

(7)Large amount of declaration,and the declaration price significantly deviates from the transaction price of the securities market at the time of declaration;

(8)Conducting a large and continuous transaction over a period of time;

(9)Conduct a large or frequent round robin transaction at the same or similar price level;

(10)Large or frequent high buy low sell transactions;

(11)Conducting securities trading that deviates from one's publicly disclosed investment analysis,predictions,or recommendations;

(12)Making false or other declaration disturbing the market order in Block trade;

(13)Other abnormal transactions that the Exchange deems necessary for key monitoring.

The Shanghai Stock Exchange may take relevant measures for serious abnormal trading behaviors

For serious abnormal trading behaviors,the Shanghai Stock Exchange may take the following measures depending on the situation:

①Verbal or written warnings;

②Appointment and conversation;

③Require relevant investors to submit written commitments;

④Restricting the trading of related securities accounts;

⑤Request the China Securities Regulatory Commission to freeze relevant securities or fund accounts;

⑥Report to the China Securities Regulatory Commission for investigation and punishment.

8.Handling of abnormal trading situations

Technical suspension or temporary market closure

According to the Trading Rules of the Shanghai Stock Exchange,if one of the following abnormal trading circumstances occurs,which results in partial or total trading failure,the SSE may decide to suspend trading technically or temporarily:

①Force majeure;

②Unexpected events;

③Technical faults;

④Other abnormal situations recognized by the Shanghai Stock Exchange.

If there is an abnormal trading situation where the number of member business departments that are interrupted or unable to declare exceeds 10%of the total number of business departments,the Shanghai Stock Exchange may temporarily suspend the market.

If the Shanghai Stock Exchange believes that there may be abnormal trading situations as stipulated above,which will seriously affect the normal operation of trading,it may decide to suspend trading technically or temporarily.

Announcement of technical suspension or temporary suspension of trading

The Shanghai Stock Exchange shall announce the technical suspension or temporary suspension of trading of this exchange.

Resume transactions

After the reasons for technical suspension or temporary market suspension are eliminated,the Shanghai Stock Exchange may decide to resume trading on this exchange.Except for special circumstances recognized by the Shanghai Stock Exchange,if trading resumes on the same day after a technical suspension or temporary market closure,the declaration accepted by the trading host before the technical suspension or temporary market closure is valid.The trading host continues to accept declarations during technical suspension or temporary market closure periods,and implements call auction trading on accepted declarations when resuming trading.

The Shanghai Stock Exchange shall not be responsible for any losses caused by abnormal trading situations or corresponding measures taken by the Shanghai Stock Exchange.

The above information is sourced from China Investor Network