How to start trading stocks

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Investors can trade stocks in a fast, secure and convenient way using the Mobile Trading System (MTS). Photo supplied

The stock market is not like a grocery store where you can just walk in and make purchases directly.

There are certain rules and mechanisms in place that investors need to be aware of to utilise their first trading experience and maximum their investment objectives. Understanding these will help reduce risk to your investment and ensure that each decision made is aligned with your investment objectives.

Opening an account

Opening a trading account is the very first step when starting your stock trading journey. In Cambodia, there are 10 securities firms licensed to provide stock brokerage services. It is advisable to contact each securities firm to seek more information about their services and commission rate to determine which broker is best for you.

Your broker will guide you through the processes involved, such as in filling out the forms needed to open an account and requesting the necessary documents. Your broker will be your first point of contact, whether you have a general or technical enquiry, or are seeking investment advice.

Placing orders

Once a trading account is successfully opened with your chosen broker, you can instruct them to place a buy/sell order for you via any of the following:

• Mobile Trading System MTS) from your mobile phone;
• Telephone;
• Email;
• Written document;
• Other communication suggested by your broker.

Understanding trading rules

There are certain rules that apply when trading stock on the Cambodia Securities Exchange (CSX). Below are the main areas of which investors need to be aware:

Trading hour: The trading hour is the period when investors can place their buy/sell order on the market. The current trading hour at CSX is from 8AM to 3PM Monday to Friday, except public holidays.

Trading currency: At the CSX, securities are traded in Cambodian riel.

Good faith deposits: A minimum deposit is not required in a trading account, unless when placing orders; however, investors are required to have 100 per cent of the cash/securities in order to place an order. For example, if you would like to place a buy order of 40,000 riel worth of shares, you need to have at least 40,000 riel in your cash balance plus the commission fee.

Type of order: There are two types of order:

o Limit order: This is an order to buy/sell securities when the quoted price is the maximum price at which you are willing to buy/sell the securities. For example, if you place a buy limit order of 10,000 riel for stock A, the order will only be executed at 10,000 riel or less.

o Market order: This is an order to immediately buy/sell a stock at the best price available. A market order does not require you to quote the price. The system will match your market order with the best possible price in the market for immediate execution.

Daily price limit: Investors can place an order at a price no greater than 10 per cent or less than 10 per cent of the base price. This means the price of each stock is allowed to increase up to 10 per cent and decrease no more than 10 per cent in a day.

Minimum order unit: The minimum order of each stock is one unit.

Order matching: Buy/sell orders will be matched in accordance with price and time priority. This means the lower asks shall have priority over the higher asks and the higher bids shall have priority over the lower bids. In the case of two orders being placed at the same price, the order received earlier shall have priority over that received later.

Clearing and settlement: Clearing and settlement are done electronically. Cash/securities can be used to place other orders immediately after being executed.

Cash withdrawal: Cash withdrawal from your trading account can be done at any time.

Trading Procedure

After the order is placed through your MTS or broker, your order will be sent to the CSX system. The system then automatically matches your order with the counter party base on the type order, price, quantity and other criteria set in the trading rules. After the orders are successfully executed, you will be informed of the trading result.

Securities Exchange, Market Operations Department
Email: [email protected]
Tel: 023 95 88 88 / 023 95 88 85

Disclaimer: This article is compiled solely for informative and educational purposes only and does not make any recommendations or offer investment advice. The Cambodia Securities Exchange is not liable for any losses or damages caused by using it in such a way.