Hong Kong Stock Trading Guide: From Beginner to Practice, Master the Core Strategies of Investing in Hong Kong Stocks in One Article

The Basic Landscape of the Hong Kong Stock Market

As one of the top ten financial markets globally, by May 2025, there are over 2,620 companies listed on the Hong Kong Stock Exchange, with a total market capitalization of HKD 38 trillion. Leading companies like Tencent, Alibaba, and BYD are all listed here, which is also a key reason many investors choose to invest in Hong Kong stocks.

However, many beginners are often deterred by the complex rules of the Hong Kong market. In fact, once you understand a few core mechanisms, participating in Hong Kong stock trading is not difficult.

Core Rules of Hong Kong Stock Trading

To make money in Hong Kong stocks, first understand how this market operates.

How is trading time allocated?

The Hong Kong Stock Exchange operates in three phases daily:

• Opening auction (9:00-9:30): transactions are executed based on price priority and time priority
• Continuous trading session (9:30-12:00, 13:00-16:00): continuous bidding, the most active trading period
• Closing auction (16:00-16:10): closing price determined through auction

What are the characteristics of the trading system?

Hong Kong stocks follow a T+0 trading model, which is a major advantage over A-shares—stocks bought on the same day can be sold on the same day, with no limit on the number of trades. However, settlement is T+2, meaning funds sold on Monday can only be withdrawn on Wednesday.

It’s important to note that Hong Kong stocks have no daily price limit. However, for large-cap stocks (constituents of the Hang Seng Index and Hang Seng China Enterprises Index), if the price rises or falls more than 10% within 5 minutes, a “cooling-off” period is triggered. During this time, trading is restricted within a specified price range, and normal trading resumes after 5 minutes.

What is the minimum investment unit?

The minimum trading unit for Hong Kong stocks is 1 lot, but the number of shares per lot is determined by the listed company. For example, Tencent Holdings (00700) has 100 shares per lot, while Kingboard Chemical Holdings (01160) has 100,000 shares per lot, a huge difference. This means the entry barrier depends on which stock you choose.

Another unique advantage of Hong Kong stocks is the ability to short sell. As long as the stock is on the Hong Kong Stock Exchange’s short-selling list (about 1,000 stocks), you can profit from shorting, regardless of whether the market is rising or falling.

Three Ways to Invest in Hong Kong Stocks

Depending on risk appetite and capital scale, there are three main approaches.

Path 1: Directly buy individual stocks

The most straightforward method is purchasing individual stocks. Hong Kong stock codes start with 0 and have five digits. According to HKEX data, there are currently 2,626 listed stocks, including 2,307 on the main board and 319 on the Growth Enterprise Market (GEM). GEM codes start with “08” and tend to have lower market value and profitability, so beginners are advised to start with main board stocks.

Popular blue-chip stocks include Tencent, Alibaba, BYD, etc. These companies are large-scale, stable, and suitable for long-term holding. For example, Tencent’s 2024 gains are 39.4%, Xiaomi’s 121.2%, Trip.com Group’s 94.5%, BYD’s 24.3%, and HSBC’s 33.2%.

To buy Hong Kong stocks, you need to open an account with a Hong Kong stock broker, such as Futu Securities, Tiger Brokers, Huasheng Securities, etc. Note that most Hong Kong brokers require trading in HKD or USD, which involves exchange rate risk. Be mindful of this when trading.

Path 2: Invest in indices and ETFs

Individual stocks can be volatile and risky, which may not be friendly for beginners. Investing in Hong Kong stock indices is a more stable choice.

Hong Kong has three major indices: Hang Seng Index (HSI), Hang Seng China Enterprises Index (HSCEI), and Hang Seng Tech Index (HSTECH). The Hang Seng Index is the most representative, comprising the largest and most actively traded main board stocks. As of March 2025, the Hang Seng Index includes 83 constituent stocks with a total market cap of HKD 27 trillion, accounting for about 67.92% of the total Hong Kong stock market.

Investing in indices can be done via futures or ETFs. Index futures have a higher entry barrier (starting at HKD 50,000), while ETFs are more suitable for ordinary investors and can be traded directly through brokers like buying stocks. Common Hang Seng Index ETFs include the Tracker Fund (02800), and the MSCI Hong Kong ETF (03115).

Path 3: Participate via Contracts for Difference (CFD)

CFDs are derivative products that track stock prices, positioned between regular stocks and futures. Compared to traditional brokers, CFDs have two main advantages:

First, lower costs. CFD trading involves no commission—only spreads and overnight fees. Second, flexible leverage. Trading individual Hong Kong stocks can leverage 1-30 times, and index CFDs can go up to 200 times, far exceeding the 2-4 times leverage typical of traditional brokers.

For example, buying one lot of Tencent normally costs HKD 35,000, but with CFDs, you can enter with just a few dozen HKD, greatly reducing trading costs. However, leverage is a double-edged sword—it amplifies gains but also losses. Use cautiously.

Practical Tips: How to Select Stocks and Manage Risks

Blue-chip stocks are more worth investing in Hong Kong

When choosing stocks, prioritize blue chips—large, stable, mature companies. Tencent, Alibaba, BYD are typical examples. These stocks are actively traded, highly liquid, and less likely to be difficult to sell.

Diversify to reduce risk

If your capital is limited, avoid putting all funds into a single stock. Consider allocating a portion to index ETFs as a core holding, and use some funds for stock picking. This way, you can enjoy Hong Kong market growth while controlling risk.

Set stop-loss and take-profit levels

Especially when using leverage, it’s crucial to set stop-loss points. Even with promising stocks, have psychological expectations to cut losses promptly when the market suddenly shifts.

Summary

Investing in Hong Kong stocks hinges on understanding market rules and choosing suitable investment methods. Features like T+0 trading, no daily price limits, and support for short selling make Hong Kong stocks more flexible than A-shares. But this flexibility also entails higher risks. Beginners should start with blue chips or index ETFs, accumulate experience, and gradually explore more complex trading strategies.