Selfwealth allows clients to place 'Enhanced Limit' and 'Market' orders on the Hong Kong Stock Exchange. We plan on introducing additional order types in future.
Market Order
A market order on the Hong Kong Exchange is an order to buy or sell a security immediately at the best market price. The price is not limited. If a stock is falling, the order will move with the market to fill up to 12 price points. If the order cannot be fully filled within 12 price points, the remaining quantity will expire unfilled.
Enhanced Limit Order
An 'enhanced limit order' is similar to other types of limit order (such as the one used on US exchanges), with the key difference that it can only match up to a certain number of 'price steps'. When you submit an enhanced limit order, it will be matched with up to 10 price steps at the same time (i.e. the best price and up to the 10th price step at 9 steps away).
When submitting an enhanced limit order, it must comply with the below requirements:
If you are submitting a buy order:
Your selected price per unit cannot be more than 9 price steps higher than the current ask price, or 24 price steps lower than the last traded price.
If you are submitting a sell order:
Your selected price per unit cannot be more than 9 price steps lower than the current bid price, or 24 price steps higher than the last traded price.
What are 'price steps', and why are they important?
'Price steps' are the minimum price increments for which an order can be submitted for a stock. The multiple depends upon the market price of the security. The 'price steps' can be referenced in the table below:
|
Stock Price |
Step |
|
0.00 – 0.249 |
0.001 |
|
0.25 – 0.495 |
0.005 |
|
0.50 – 9.99 |
0.01 |
|
10.00 – 19.98 |
0.02 |
|
20.00 – 99.95 |
0.05 |
|
100.00 – 199.90 |
0.10 |
|
200.00 – 499.80 |
0.20 |
|
500.00 – 999.50 |
0.50 |
|
1000.00 – 1999.00 |
1.00 |
|
2000.00 – 4998.00 |
2.00 |
|
5000.00 + |
5.00 |
Prices in HKD
For example, If AIA is trading at $85.00, its price steps are five cents as per the above table.
This is important because the Hong Kong Exchange rules around 'enhanced limit orders' determine that a new buy or sell order can only be priced, up to 10 'price steps' from the current stock value. You can adjust your preferred price per unit one step at a time by using the plus and minus buttons next to 'Price Per Unit'.
What happens if I place an 'enhanced limit order' and the current price moves further than 10 price steps from my price per unit?
It is quite common for stock prices to fluctuate rapidly and the order to fall outside the 10 'price steps' from when the order was originally submitted.
In these situations, the order will remain in the market until the order either fills or expires if unfilled as per a traditional order.