Its overall economic conditions, economic freedoms and world-class exchanges make Hong Kong a favorable place for investors and traders who want to trade on the Stock Exchange of Hong Kong (SEHK).
Open an account with a reputable broker in order to trade stocks in Hong Kong. Keep in mind that not all brokerages are created equal, so be sure to carefully consider your needs before you open an account.
Quick Look: Best Hong Kong Stockbrokers
- Best Overall: HSBC Broking Services Limited
- Best for Beginners: Charles Schwab
- Best for Day Traders: Interactive Brokers
- Honorable Mention: Boom Securities
- Honorable Mention: SHK Direct
Overview: Trading Stocks in Hong Kong
Securities trading began in Hong Kong in 1866, but a formal stock market did not exist until the opening of the Hong Kong Stock Exchange (SEHK) in 1914, which arose out of the Association of Stockbrokers, founded in 1891.
Since its independence as a British Dependent Territory of the United Kingdom in 1997, Hong Kong has become one of the world’s leading financial centers due to its low taxes and free trade agreements. This makes the SEHK one of the easiest international markets for investing and trading.
According to the Heritage Foundation, the Hong Kong Special Administrative Region of China ranks as the number one country in the world for financial freedom with a score of 90.2. The SEHK is ranked as the fourth-largest in Asia and fifth in the world by its market capitalization of just under $4 trillion.
The SEHK has oversight from the Securities and Futures Commission of Hong Kong (HKSFC), which is an independent agency charged with regulating the securities and futures markets in Hong Kong. The agency also supervises market participants such as brokers, fund managers and investment advisors. Regulation by the HKSFC is important when selecting a stockbroker to trade local stocks through in Hong Kong.
The SEHK’s trading hours begin with a pre-opening session from 9 a.m. until 9:30 a.m. and the securities’ opening price is announced at 9:20 a.m. A continuous session takes place from 9:30 a.m. until 12 p.m. At noon, an extended one-hour trading session happens, called the “lunch break.” Another continuous trading session occurs from 1 p.m. until 4 p.m.
As of November of 2014, Hong Kong traders and investors can trade in over 2,000 eligible securities on the Shanghai and Shenzhen stock exchanges through a program called “Stock Connect.”
Features of a Great Stockbroker
Several elements should be considered before you decide on opening an account to trade stocks through in Hong Kong. They include:
Regulation and Exchange Membership
To trade stocks on the SEHK, you must go through a broker registered with the HKSFC. Stockbrokers who do business in Hong Kong must also be members of the stock exchange in order to act as intermediaries for traders and investors.
HKSFC protects investor interests and requires all financial intermediaries who do business on the SEHK to conform to HKSFC’s rules and regulations.
Your potential broker should ideally have an electronic trading platform for you to place stock orders on the SEHK
Fundamental traders and investors often rely on the information provided by a good research department.
Full-service brokers will typically charge more but provide better quality market research as well as other features that cheaper discount brokerages do not offer.
Commissions and Fees
Active traders typically pay per trade commissions more often than inactive traders and investors. Since keeping costs low will improve your bottom line, you might want to select a discount broker with reduced transaction fees.
Most traders, especially those who are inexperienced, will appreciate the assistance provided by a good customer service department. A customer service department should be able to help you resolve trading-related issues. You can reasonably expect any decent stockbroker to give you access to customer service via telephone, email and live chat.
Our Picks for the Best Stockbrokers in Hong Kong
Finding the best online brokerage depends largely on your needs as an investor or trader. If you trade actively and do your own research, a discount broker with low commissions would probably be the most advantageous.
If you rely on outside research and investment advice, then a full-service broker could make more sense.
Best Overall: HSBC Broking Services Limited
A subsidiary of the Hong Kong Shanghai Banking Corporation, HSBC Broking Services Limited, is a full-service brokerage based in Hong Kong. As a full member of the SEHK, this broker is regulated by the HKSEC. HSBC’s other Asian subsidiaries include HSBC Broking Securities, HSBC Broking Futures and HSBC Broking Forex.
Through an HSBC Broking account, you can also trade bonds, forex, precious metals, exchange-traded commodities, derivatives, initial public offerings, sub-underwriting and placements. HSBC Broking’s online trading platform is called NetTrader. Although it lacks many features of other brokers’ platforms, it seems adequate for basic procedures like entering orders and receiving confirmations on stock trades.
While no NetTrader mobile app is yet available, the HSBC Internet Banking app tracks your banking activity and can update the status on your stock trades. As one of Asia’s largest banking and financial services companies, HSBC offers clients access to excellent research on Asian and international stocks. You can also trade stocks listed on other Chinese exchanges.
The minimum brokerage per transaction for Hong Kong stocks is 100 HKD and 100 RMB for mainland stocks. Customer service is available in multiple languages and can be accessed via live chat, telephone contact or through email.
Best for Beginners: Charles Schwab
Our pick for beginners has an extensive array of educational material for new traders. U.S.-based Charles Schwab has a Hong Kong office and is a member of the SEHK. The stockbroker is also registered with the HKSFC, in addition to a slew of other international regulators.
To take advantage of Schwab’s educational resources and to trade stocks listed on the SEHK, you can simply open a Schwab brokerage account. The Schwab brokerage account used for domestic trading in the United States can be used to trade securities internationally via the Schwab Global Investing Services desk.
If you’re based in Hong Kong, opening a Schwab account allows you to trade U.S. equities, fixed income securities and offshore mutual funds. You can also trade American Depository Receipts (ADRs) so you can invest in thousands of companies whose home base is outside the U.S.
Schwab’s full-featured trading platform is known as StreetSmart Edge. This desktop trading software features streaming live quotes, a news feed and sophisticated charting and technical analysis capabilities. A web-based version of the platform and mobile applications for iOS and Android devices are also available.
Customer service for Schwab Hong Kong is available to clients via telephone, email and a form on their website. A rather hefty minimum of USD $10,000 is required to open an account, while stock transactions on the SEHK cost a minimum of 250 HKD online and 600 HKD with telephone assistance, which may be on the high side for many traders.
Best for Day Traders: Interactive Brokers
Interactive Brokers is a major international broker based in the United States. Interactive Brokers maintains an office in Hong Kong, is a member of the SEHK and is regulated by the HKSEC, as well as numerous other regulators internationally.
Interactive Brokers also has some of the lowest commissions for trading stocks in the business, including Hong Kong shares, which makes it the best broker for day traders who want to trade Hong Kong stocks. Commission on Hong Kong stock trades is a low 18 HKD per transaction, the lowest we could find for members of SEHK.
The Integrated Investment Account gives you access to trade in a wide variety of assets listed on over 120 world exchanges. In addition to SEHK stocks, you can trade ETFs, forex, metals, futures, options, funds, bonds and structured products.
Interactive Brokers’ trading platforms include an easy-to-use platform called Client Portal, ideal for less-experienced traders. The broker also offers a professional Trader Workstation (TWS) platform with many features that experienced traders can find useful. Interactive Brokers also offers a web-based platform known as IBKR WebTrader.
An IBKR mobile app is available for Android and iOS tablets and smartphones.
A hands-free access app, IBot, can also be downloaded for use with the Client Portal.
Interactive Brokers’ minimum deposit of USD $10,000 may seem somewhat excessive for some traders, but it is on a par with Charles Schwab’s requirement. Its customer service department can be contacted on a 24/6 basis using email, live chat and phone.
Honorable Mention: Boom Securities
Founded in 1997, Boom was the first Asian broker to offer online stock trading to retail investors in the Asia-Pacific region. The broker is a subsidiary of Japanese Monex Group, Inc. that has over 300 billion HKD in assets. It is a member of the SEHK and is fully regulated by the HKSEC.
The broker’s trading platform lets you access 12 different international markets, allowing you to trade multiple asset classes from the same account. The Monex Boom platform can also be downloaded as a mobile app for Android and iOS devices.
The broker’s platform also gives you direct market access to Hong Kong stocks and commodity futures and straight-through processing (STP) for U.S. and Japanese markets.
In addition to SEHK stocks, Boom offers trading in Hong Kong futures, multiple currency pairs and margin trading. The broker’s research offerings include technical analysis, stock signals, a daily Dow Jones market briefing and a daily technical analysis newsletter.
Customer service can be accessed via telephone, email and fax in Mandarin, Cantonese and English. The minimum commission per trade is 88 HKD, 88 RMB or USD $12. Several other costs depend on the trader’s location.
Honorable Mention: SHK Direct
Our second honorable mention is Sun Hung Kai, or SHK Direct, based in Hong Kong. In addition to SEHK shares, you can trade futures, forex, stock options, warrants, U.S. shares, HK IPO shares and also trade on margin. The broker was one of the first brokers to be authorized to offer leveraged forex trading in the Hong Kong domestic market.
SHK Direct’s trading platform won two notable awards in 2017. The first was for Outstanding Online Trading Platform at the Hong Kong Digital Brand Awards and the second was a silver award for Best E-Commerce Merchant Financial Services at the eCommAs Awards. SHK’s trading platform is actually three platforms, one for HK shares, one for futures and one for stock options. It also has a mobile app for Android and iOS devices.
The broker’s research offerings include an Investment Daily Note, a Monthly Thematic Report and a Weekly Investment Strategy article. Customer support can be reached via email, telephone and fax and is available during normal Hong Kong business hours.
Commissions for SEHK stocks is a minimum of 88 HKD per trade, with phone orders subject to an extra 20 HKD surcharge per executed trade. The 20 HKD surcharge is waived on the first three executed trades per month.
Trading stocks on the SEHK can be quite straightforward and secure, especially if you open an account with a reputable broker. Your particular requirements will define the best type of broker for you, and that includes your experience level and the number of funds you can commit to your trading account.