Rich Dad’s Financial IQ Cultivation: Stock Fundamentals

Chapter 18 How to Trade Stocks (2)
(Section [-]) Entrusted Transactions

With my ID card and shareholder card, I can choose a brokerage business department with good reputation, complete implementation and better service quality, and then sign an agency agreement with the relevant brokerage business department, specify the transaction agreement, open a capital account, and set up the transaction Password, you can invest in stocks. Stock trading operations usually include computer self-service entrustment, telephone entrustment, and counter written entrustment. At present, there are few methods of over-the-counter written entrustment. Most investors usually use computer self-service entrustment methods. You can learn more about which entrustment method to use at the securities business department where the account is opened.

Online trading is also a very convenient trading method. Investors only need to operate the computer at home to view real-time market conditions and conduct trading operations. According to the agency agreement and risk disclosure statement, investors must install relevant online trading software at the computer dealer and set up a transaction password to realize online transactions.

In addition, Bank Link is also a more convenient way. Bank Link is also called Bank-Securities Link. This business is based on the network between banks and securities firms. Investors can directly use it at various outlets of banks (such as ICBC, Agricultural Bank of China, China Construction Bank, China Merchants Bank, etc.) The current savings account card opened is converted into a securities margin account, through the bank's entrustment system (such as telephone banking, bank counter system, bank online transaction system, mobile banking), or through the entrustment system of the government business (telephone entrustment, self-service Keyboard entrustment, online entrustment, household call center, etc.,) a new type of financial service business for securities trading, such as the "Peony Securities Card" of Industrial and Commercial Bank of China, and the "One Card, Bank-Securities Link" service of China Merchants Bank.

Bank-Securities Link has its own characteristics:

The first is trading monthly entrustment, which can be used to make scheduled transactions. Many customers usually have to go to work and have no time to watch the market. Then customers can be optimistic about a stock in advance and set a buying or selling price. If the stock reaches this price , Bank-Securities Link will automatically buy or sell, and the price set by the customer is valid within 30 days, which solves the problem of customers not being able to pay attention to the market when they go to work and on business trips, and provides customers with more free time.

The second is the rolling order function developed on the basis of appointment order, that is, the buying price and selling price can be set at one time, and the longest order period is still 30 days. For example, if a customer expects a certain stock to rise within this period, Then you can set the buying price at 1.40 yuan and the selling price at 1.80 yuan. If the stock market reaches the corresponding buying price and selling price, Bank-Securities Link will automatically help customers to make transactions, and within this period, if If the customer's expectations have changed, the transaction price can be changed at any time, and both transaction and non-transaction hours can be changed. Finally, as long as the customer has applied for the Bank-Securities Link, the customer's personal balance sheet and balance sheet will be available in the online bank. Customers can check how many deposits, liabilities, loans, and funds are left in the card at a certain point in time.

Through this function, customers can not only check each transaction, but also know the income of each transaction. In addition, there is also a text message function. If a stock is traded, a text message will notify the customer of the transaction and income.

Bank-Securities Link also has the following functions:

(1) Can conduct Shenzhen and Shanghai A shares, debt, fund transactions, and B shares;
(2) Possess all functions of bank account fund deposit and withdrawal, transfer, consumption and payment;
(3) Automatically linked securities margin account, one account, savings, stock trading dual-purpose;
(4) Telephone, Internet, and mobile phones can complete transactions;

(5) Senior experts provide online financial management and personalized services.

1. The difference between Bank-Securities Connect and business department transactions

(1) Bank-Securities Link mainly uses off-site transactions, which is suitable for office workers, investors who are short of time, who are far away from the business or do not want to go to the business department;
(2) The trading methods of Bank-Securities Express customers are mainly telephone entrustment and online trading; in addition to the above-mentioned trading methods, customers of the sales department can also go to the sales department for counter transactions;

(3) The transaction fee of Bank-Securities Link is usually lower than that of the sales department, and the handling fee of Bank-Securities Link is generally less than 1/3 of the handling fee of the sales department.
2. Handling fee for new shareholders
(1) Go to the original account opening business department to go through the formalities of canceling the designated transaction in Shanghai and transferring custody of stocks in Shenzhen;

(2) Bring your shareholder account card, the original and a copy of your ID card, and the Shenzhen Stock Custody Order Customer Contact (if you already have a bank current account, you can also bring the bank current savings card), and go to the relevant bank outlets to apply for "bank-securities" through” account opening procedures.

3. When will the frozen funds of Bank-Securities Link be returned?

If the investor does not withdraw the order by telephone before the market closes on the day, the funds frozen by the user due to the entrustment will not return to the account until the bank clears. Since the clearing time of each bank is different, the time when the funds arrive will also vary. Different, the order will generally be cleared between 20:00 and 24:00 on the same night. After the liquidation, the user can normally use the previously frozen funds. However, if the customer cancels the order by telephone after placing the order, The funds will be automatically returned to the user's account after the market closes that day, without having to wait until the next morning.

The frozen funds do not transfer ownership, but only restrict access, so interest is also credited to the customer's own account.

(Section [-]) Transaction

[-]. Basic principles of transaction

([-]) Price Priority Principle

The principle of price priority means that higher buy orders are given priority to lower buy orders, and lower sell orders are given priority to higher sell orders; for orders at the same price, those who declare first are given priority.In addition to the above-mentioned prioritization principles, market price trading takes precedence over limit price buying and selling during computer terminal bid bidding and plate bidding.

([-]) The principle of transaction time priority

This principle refers to: in the verbal bidding, arrange according to the order that the intermediary broker heard; sorted in order.When it is impossible to distinguish the priority, the intermediary broker will organize a lottery to decide.

([-]) Principles for determining the deal
This principle means: in the verbal bid bidding, the price of the highest buying order and the lowest selling order are the same, that is, the transaction.When declaring bids on computer terminals, in addition to the provisions of the preceding paragraph, if the declared price of the buyer (seller) is higher (lower) than that of the seller (buyer), the average middle price of the declared prices of both parties shall be used; if the buyer and seller only have the market price For orders with unlimited price orders, the latest transaction price of the day or the price displayed at that time is adopted.

[-]. Bidding transaction procedures

([-]) Board Competitive Transactions

1. Operating procedures
(1) When an on-floor telephone operator receives a notification of securities trading from his business office, he shall record it in the "Entrustment Telephone Record Book" in order, and then issue a trading order to the on-floor market representative.

(2) After receiving the buying and selling order from the telephone operator, the market exit representative should first check whether the declared price has reached the price announced on the "Bidding Bulletin Board".If it is reached, the on-site market representative will fill in the buying and selling order in the price column of the bidding bulletin board, and fill in the code name of the securities firm and the quantity of buying or selling in the appropriate column.If the declaration does not reach the board price, the floor market representative should classify and summarize the unannounced buying and selling orders according to the name and price of the securities, that is, for each security, the buying price is from high to low, and the selling price is from low to high. When the price is reached, it will be registered in the "Bidding Notice Board".

(3) After each transaction is completed, the seller's market representative should immediately fill in the "Transaction Record" and sign it, and after submitting it to the buyer's market representative for confirmation, send the transaction record to the counter designated by the stock exchange to print the transaction time and transaction number. Then hand the red one to the buyer for receipt, the yellow one to the clearing counter of the stock exchange, and the blue one to the telephone operator.

(4) After receiving the "Transaction Record", the telephone operator should compare the transaction quantity recorded in the "Business Record Book", delete or cancel the transaction quantity, and notify his business place of the transaction status by phone, so as to pass it on to the client and create relevant certificates.The telephone operator should pay close attention to the changes in the market prompts, compare the prices and quantities contained in the "Entrustment Telephone Record Book", and remind the market representatives on the market of buying and selling orders at any time.

(5) At the close of the market every morning or afternoon, the codes, total amount and net balance of receipts and payments of each securities firm shall be checked with the exchange, and only after all reconciliations are correct can they leave the trading floor.

2. Principles for filling out the bidding notice board

(1) The bidding notice board is limited to four price levels, namely the highest unsold buying price, the second highest buying price, the lowest selling price, and the second lowest selling price. The quantity declaration at each price level should be in chronological order fill in.

(2) At the opening of the market every day, before the price is registered on the board, the market representative of the securities market should take yesterday’s closing price as the benchmark, and fill in the declared price that meets the standard in the upper and lower units. On the "Bidding Notice Board", the entry price of the buyer's second hand cannot be lower than that of the previous hand; the listing price of the seller's second hand cannot be higher than that of the former hand.

(3) When the market opens, under normal circumstances, both buyers and sellers can list their bids on the Bidding Notice Board.In the event of confusion and congestion, the staff on the floor of the stock exchange have the right to decide whether the buyer or the seller should list first.The declared price after the daily market opening shall be based on the latest registered price or transaction on the "Bidding Bulletin Board", and the upper and lower units shall be limited to two upward and downward increments.

(4) When the buyer's (seller's) declared price is one price higher (lower) than the highest bid price (lowest selling price) registered on the "Auction Notice Board", the subsequent declarer should first place the highest price registered on the board. Rewrite the buying price (lowest selling price), and then move the content in the column of the second highest buying price (second lowest selling price) to the right column, and fill in the securities company code and trading name of the second hand in the left column. quantity.

If the buyer (seller) declares that the price of the second hand is higher (lower) by two price points than the highest buying price (lowest selling price) recorded on the board by the former hand, the second hand can rewrite the price and rewrite the original price of the previous hand. Erase all the content in the buyer (seller) column, and then enter your code name and purchase (sell) quantity.

The registered price on the board that was erased when the price was rewritten must be refilled by the market representative when it reaches the declared price on the "Bidding Notice Board" again.

(5) The content registered on the board shall not be arbitrarily revoked or the declared quantity shall be reduced, but if the price is changed or the quantity is increased, a new declaration must be made according to the price on the board.

Once the content on the board is concluded, neither party shall change or revoke it, otherwise, it shall be treated as a breach of contract.

(6) When the transaction is completed, the buyer or seller should delete or cross out the quantity listed on the board by the other party’s market representative, and then write the transaction price and quantity of the securities department code of each transaction on the blackboard, and the remaining part after the transaction It should be written on the "Bidding Notice Board" and the transaction will continue next time.

3. The order of transactions

(1) A higher buy limit order has priority over a lower buy limit order; a lower sell limit order has priority over a higher sell limit order.

(2) For declarations at the same price, the order of priority shall be determined according to the order of declaration.

(3) For declarations at the same price, client-entrusted declarations take precedence over securities firms’ self-operated trading declarations.

The market representatives of all securities firms shall refer to the above principles when executing client orders.

(4) Cancel market order.

4. Principles for determining transaction price

The highest buy order and the lowest sell order are traded first.

5. Buying and selling of two-sided customers
Two-sided customer trading means that the buyer and the seller enter into a transaction through the same securities firm.When the same securities firm receives orders for buying and selling of the same stock at the same price, it may conduct two-sided trading in accordance with the following principles.

(1) After a transaction is completed, the transaction price can be used immediately for bilateral customer transactions.

(2) When there is a price difference between the buying and selling prices on the market, the transaction price can be the buying price when it is in a "bull market" and the selling price when it is in a "bear market".

(3) When the difference between the buying and selling price on the market is more than two price levels, or there is no buying and selling price, or only buying or selling price, the market representative must write the appropriate buying and selling price on the board so that the price meets (1) or ( 2), and then slowly leave the "Bidding Notice Board" to give other market representatives the opportunity to trade. If no one trades with him, he can conduct two-sided customer trading according to (1) or (2).

(4) When all two-sided customers make a deal, the market exit representative on the floor should call out "two-sided customers", and at the same time mark the securities firm code and mark "C" as well as the transaction price and quantity under the "Bidding Notice Board", and fill in it immediately Make a "Transaction Record" and send it to the special counter designated by the stock exchange as quickly as possible to print the time and number.

6. Principles for determining the opening price and closing price

(1) The first transaction price after the market opens is the opening price.

(2) Before the closing bell rings on the day, the staff of the stock exchange will draw a line on the transaction record, and the last transaction price on the line will be the closing price.

If there is no transaction on the day, the stock exchange will determine the closing price of the day based on the opening price based on the market trend and the bidding situation.

7. The business executives of the stock exchange shall check and supervise the telephone record books and other conditions of the market representatives at any time, so as to ensure that the principles of openness, fairness and justice are implemented throughout the transaction.

([-]) Singing and reporting transactions

1. Operating procedures
(1) When the telephone operator receives the entrusted (or self-operated) securities trading matters reported by his business office, he shall record them in the "Entrusted Telephone Record Book" in order, and then issue trading orders to the market representatives on the floor.

(2) After receiving the trading order from the telephone operator, the market representative goes to the stock exchange's designated stock trading price area to call for price trading.

(3) The trading of stock reports adopts the method of continuous bidding in separate cabinets.The stock exchange shall designate the area where representatives of securities firms participate in the outcry in stock trading, and the staff of the stock exchange have the right to stop the outcry outside the designated area.

(4) The buyer or seller calls out the price, and once the other party promises to accept it, it is a transaction.Once the transaction is completed, the seller should immediately fill in the "Transaction Record" according to the regulations, and submit it to the buyer for signature. At the same time, send the "Transaction Record" to the designated counter of the stock exchange to print the time and transaction number, and then hand over the red copy to the buyer for receipt. Give the yellow one to the clearing counter of the exchange, and the blue one to the telephone operator.

(5) After receiving the "Transaction Record", the telephone operator should compare the transaction quantity recorded in the "Entrustment Telephone Record Book", delete or cancel the transaction quantity, and then notify the business place so that it can be passed on to the client and make relevant transactions. certificate.

(6) When the quantity recorded in the "Entrustment Telephone Record Book" cannot be fully sold, the remaining quantity can be continued to be sold next time.The telephone operator should pay close attention to the market prompts for changes.Comparing with the price and quantity contained in the "Entrustment Telephone Record Book", remind the sales representative in the market at any time.

(7) When the market closes every morning or afternoon, the market personnel of each securities firm shall check the name, quantity, price, code name, total amount and net balance of receipts and payments of the securities traded in the current market with the stock exchange as soon as possible, Only after all reconciliations are correct can you leave the trading floor.

2. Outcalling rules for market delegates
(1) When a market representative participates in reporting stock trading, in addition to expressing the buying or selling price with hand gestures, he must verbally shout out the type and price of buying or selling.The buyer raises his hand with the palm facing inward, and the seller raises his hand with the palm facing outward. The specific price and quantity gestures are uniformly stipulated by the stock exchange.

(2) The first outcry after the opening of the market is limited to the upper and lower two units of yesterday's closing price.The price of the buyer's second hand shall not be lower than that of the former hand, and the seller's second hand shall not be higher than that of the former hand.

(3) When the buyer or seller calls out the price, except for the first call at the opening of the market, the full buying price or selling price per share must be reported, and only the last two digits may be called out during the bidding process.In the event of an increase or decrease of one place, the full amount of the buying or selling price per share must still be reported.

(4) The market representative must raise his hand or declare several times loudly in order to let everyone know the price.Once a bid or offer has been called, it cannot be revoked unless another new bid appears.

(5) The highest bidding price of the buyer or the lowest bidding price of the seller shall be given priority in the transaction.The same bidding price is determined according to the order of precedence.

(6) When the quantity of the transaction between the buyer and the seller does not reach the buying or selling quantity at the original bidding price of the buyer or seller, the transaction price is still valid for the unsold part until another new bidding price of the buyer or seller appears.

Once the buyer or the seller calls out the price, once the other party promises to accept it, the transaction is established, and neither party can change it.

2. Buying and selling of two-sided customers
When securities firms receive buy and sell orders for the same type of securities at the same price, they should still call out publicly in the venue.If he wants to make a deal on his own, that is, to do double-customer trading, he must follow the principle of double-customer trading on the board auction.

When the two-sided customer makes a deal, the market representative should call out the two-sided customer, the transaction price and the transaction quantity, and should immediately fill in the transaction record, and send the transaction record to the counter designated by the stock exchange as quickly as possible to print the time and number.

3. Principles for determining the order of transactions

According to the bidding principle on the board.

4. Principles for determining transaction price

The highest buy order and the lowest sell order are executed first.

5. Principles for determining the opening price and closing price

(1) The chairman’s call price system is adopted at the opening of the market, that is, the staff in charge of the verbal bidding counter designates the buyer or seller of a certain stock to call first, and the first transaction price after the market opens is the opening price.

(2) The last transaction price before the closing bell rings on the day is the closing price.If there is no transaction, it will be determined according to the operation principle of listing.

([-]) Automatic computer trading

1. Operating procedures
(1) The purchase and sale declaration of computer trading is input by the terminal and is valid only on the same day.

(2) The input of buying and selling orders is carried out half an hour before the start of the market meeting time.The time for entering the purchase and sale declaration in the preceding paragraph may be changed by the stock exchange if it deems it necessary.

(3) The transaction declaration shall be entered in order of the securities firm code, power of attorney number, type of entrustment (financing, securities lending, centralized custody, self-custody), securities code, unit price, quantity, type of transaction, input time, and agency or self-custody. camp.But the stock exchange may increase or decrease according to need.For the serial number entered in the preceding paragraph, the securities firm shall assign each terminal in accordance with the order in which the order is received, and skip numbers shall not be allowed.

(End of this chapter)