Understand and pay attention to stocks, dispose of stocks at once

        When you find a stock with a red name on the trading software, it means that it is likely to have been listed as a "caution stock" or "disposal stock". This is a market warning mechanism established by the stock exchange and over-the-counter trading centers, with a simple purpose: to remind investors to be particularly careful about the recent volatility, overheated trading, and high turnover of this stock.

        Stock Exception Trilogy: Normal Stocks → Pay Attention to Stocks → Dispose of Stocks

                When stocks trigger some abnormal trading conditions, they will be listed as attention stocks; If abnormal conditions occur continuously, it will be upgraded to disposing of stocks, with the aim of cooling down overheated trading.

        What is' attention stock '?

        According to the "Measures for Securities Surveillance System", "Key Points for Announcement or Notification of Attention to Trading Information and Disposal Operations", and "Detailed Data and Exclusions for Abnormal Standards in Article 4 of Announcement or Notification of Attention to Trading Information and Disposal Operations" formulated by the Stock Exchange and the Over the Counter Trading Center, individual stocks are listed as attention stocks with four common triggering situations:

        1 The stock price is rising too fast

        The percentage increase in closing price over 30 business days exceeds 100%.

        The percentage increase in closing price over 60 business days exceeds 130%.

        The percentage increase in closing price over 90 business days exceeds 160%.

        The cumulative closing price has risen or fallen by more than 25% in the past 6 business days (including the current day).

        2 Trading is too hot

        The daily turnover rate is over 10%.

        The cumulative turnover rate in the past 6 business days (including the current day) exceeds 50%.

        Turnover rate "refers to the" buying and selling ratio "of a stock over a period of time, and can also be seen as the" trading heat level "of the stock.

        3 Evaluation indicators are too high

        The stock price to net asset value ratio is more than 6 times.

        The price to earnings ratio is negative, or more than 60 times.

        4 When the impulse ratio is too high

        The current transaction volume accounts for over 60% of the total transaction volume for that day.

        The proportion of current transaction volume to total transaction volume in the past 6 business days exceeds 60%.

        Will stocks affect trading?

        can't. Note that stocks can still be bought and sold normally, and there is no need to prepay the full amount of the stock price. The warning is only to remind investors that the risk is increasing.

        Under what circumstances will it become a 'disposal stock'?

        When a stock is repeatedly listed as a watch stock, it will be upgraded to a disposal stock, representing being subject to regulation, which is commonly referred to as "closed door" or "imprisonment".

        1 Common triggering conditions:

        Reaching the attention stock standard for 3 to 5 consecutive business days.

        Within 10 business days, 6 business days meet the criteria for paying attention to stocks.

        Within 30 business days, 12 business days meet the criteria for paying attention to stocks.

        2 Two disposal stages:

        1. First disposal (10 business days)

        Match every 5 minutes.

        When the number of transactions exceeds 10 per transaction or 30 cumulative transactions, a load transaction must be conducted.

        Suspend margin trading and securities lending.

        Cannot be rushed.

        2. Second disposal (still within 10 business days)

        If the situation still does not improve and the stock meets the disposal criteria again within 30 days, a second disposal will be carried out, adding trading restrictions on the original basis. The difference from the first disposal is:

        Match every 20 minutes.

        Regardless of the transaction volume, load trading is used.

        'Load trading' refers to investors informing the salesperson of the disposal shares and quantity they want to buy before placing an order, obtaining the securities firm's load account, paying the full amount, and waiting for the salesperson to verify the accuracy before entrusting, rather than making payment two days after the transaction. In addition, if the condition of high hedge ratio is triggered, the disposal period will be 12 business days.

        Where can I search?

        Information about stocks being listed as precautionary or disposal stocks can be found on the official websites of the stock exchange and over-the-counter trading centers. Here are the relevant query links:

        Stock Exchange (Listed Stocks): Publish information on abnormal cumulative attention times, pay attention to stocks, and dispose of stocks

        OTC Market (OTC Stocks): Publish information on abnormal cumulative attention times, pay attention to stocks, and dispose of stocks

        It is worth noting that the regulatory authority retains flexibility, and the final decision on whether to become a notice stock or a disposal stock is made by the stock exchange and over-the-counter trading center. It is not necessarily announced just because the standards are met.

        Conclusion

        'Attention stocks' are reminders,' disposal stocks' are cooling measures, and the intention of regulatory authorities is to maintain market order. The next time you see a red letter in a stock, there is no need to panic excessively, but you should not blindly follow the trend and chase after prices, in order to avoid being cut off. After all, short-term fluctuations will eventually return to rationality, and the core of investment is still the company's fundamentals and long-term value. What can truly stay is a good company with competitiveness and growth potential. Rather than chasing short-term popularity, it is better to conduct in-depth research on the corporate structure, which is the key to stable investment and long-term profitability.

        Fraud prevention promotion: Oriental Securities Corporation reminds investors not to trust invitations from unknown sources such as phone calls, text messages, LINE friend links, groups, or communities, and not to further deliver property or personal funds. If you have any doubts, you can call the 165 anti fraud hotline for verification.

        *Image source: freepik

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