Trading local stocks online

As you know short selling is very restricted in HK and only securities designated by SEHK can be sold short. SHKOnline offers online trading in HK stocks but, because of the tight restrictions, does not allow short selling for its online customers.

From SHKOnline:


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To enhance your trading flexibility, we have launched a new T+2 settlement policy (short selling is not allowed) that enables cash account traders to invest in the stock market with extra convenience.


To invest in High Grade stocks, you need to pay only 30% cash upfront and 50% for Medium Grade stocks, and then settle the balance on T+2. Please note that Low Grade stocks are excluded. To check stocks grading, please click here.


In addition, you can use your stock portfolio value as "Purchasing Power": trade up to 70% of the value of your High Grade stocks and up to 50% of your Medium Grade stocks.


Example of calculating "Purchasing Power":


Your account has HSBC at a value of $100,000. You want to buy Great Eagle at a value of $160,000.



Stocks hold (Grade) Total Value

HSBC (High - 70%) $100,000


Stock to be bought (Grade) Total Value

Great Eagle (Med - 50%) $160,000


Purchasing Power

$70,000 ($100,000 x 70%)


Amount to be paid before trading day

$10,000 ($160,000 x 50% - $70,000)


Amount to be settled on T+2

$150,000 ($160,000 - $10,000)


As your account has HSBC at a value of $100,000, your Purchasing Power is $70,000. To buy Great Eagle at a value of $160,000 you need to pay $10,000 before the trading day and you are required to settle $150,000 on T+2.


If you do not settle the balance, you will lose all of your Purchasing Power in addition to a P+3% per annum interest charge and a 1% penalty fee on the debit amount.

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I have used SHK for paper transactions and there has been absolutely no hard sell. The staff I have dealt with have been polite and helpful. At least give them a call to see if they can advise you on this.

Does anyone know any online HK based brokers who could by shares on the SGX exchange?