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1. Trading Rules

U.S. stocks are T+0 transactions, and stocks bought (shorted) on the same day can be sold (buyback) on the same day.

After buying (short selling), investors find that they have made a mistake in judgment and can sell (buyback) in time to avoid risks and losses.

2. Settlement rules

Effective September 5, 2017, the standard settlement period for securities traded on U.S. and Canadian exchanges will be reduced from 3 business days (T+3) to 2 business days (T+2).

3. Limit on US stock price volatility

Unlike A-shares, there is no limit on the ups and downs of U.S. and Hong Kong stocks in a single trading day. Investors need to control their risk.

4. Why the sell order price of U.S. stocks is lower than the best ask price, but can not be traded

(1) Quote Delay

Under the U.S. stock market trading system, most of the transactions are conducted through specialized dealers and market makers. They are only required to notify the public within 90 seconds after each deal is made. In this case, the information we see is delayed on all real-time market systems.

(2) The definition of「lot」

In the U.S. stock market, the unit for buying/selling shares is one. However, in order to reduce the transaction cost and lower the risk for stock holding, dealers and stockholders will trade in unit of 100. In this understanding the unspecified one 「lot」is 100 shares. If the investors place orders not in multiples of 100, they may need to wait a while.

5. Extended Trading Introduction

Extended trading is trading conducted by electronic networks either before or after the regular trading hours of the listing exchange. Such trading tends to be limited in volume compared to regular trading hours when the exchange is open.

Pre-market trading in the United States, in terms of stocks, usually runs between 4:00 a.m. and 9:30 a.m. Eastern Time, and after-hours trading typically runs from 4:00 p.m. to 8:00 p.m. Eastern Time.

(1) Extended Trading Risks

The U.S. Securities and Exchange Commission(SEC) highlights several risks associated with extended trading, including:

(2) Limited Liquidity

Extended hours have less trading volume than regular hours, which could make it difficult to execute trades. Some stocks may not trade at all during extended hours.

(3) Large Spreads

Less trading volume often translates to wider bid-ask spreads, which can adversely affect the market price for execution, making it harder to execute orders at favorable prices.

(4) Increased Volatility

Less trading volume often creates an environment for greater volatility given the wider bid-ask spreads. Prices can move drastically in a short amount of time.

(5) Uncertain Prices

The price of a stock trading outside of regular hours may not closely match the price during regular hours.

(6) Professional Competition

Any extended trading participants are large institutional investors, such as mutual funds, that have access to more resources.