04 · Stocks
Stocks are the asset class ordinary people encounter most: A-shares, HK stocks, and US stocks — three markets, three sets of rules. This chapter first explains the essence of stocks and how indexes work, then breaks down the trading rules of A-shares and of HK/US stocks separately, and closes with a complete analysis methodology running from fundamentals through valuation to pitfall avoidance.
Chapter Guide
Stock Basics · The Foundation
What a stock actually is, what rights shareholders have, who participates in the market, and the journey from founding to IPO. Then meet the most important indexes (SSE Composite, CSI 300, Hang Seng, S&P 500, etc.), learn to tell dividends apart from bonus shares, capitalization issues and ex-dividend/ex-rights adjustments, and finish with one table on the essential differences among stocks, futures, and spot. The bedrock of this chapter — every rule and concept makes its first appearance here.
A-Share Trading Rules · The Home Battlefield
A practical A-share handbook: opening and closing hours, how the call auction matches orders, what exactly T+1 restricts (and how to legally trade a pseudo-T+0 with a base position), price limits and first-day rules for the main boards/ChiNext/STAR/BSE, 100-share lots and odd-lot selling, where every yuan of commission/stamp duty/transfer fee goes, how IPO subscription allocates by market value, the thresholds and mechanics of margin trading, the account types (cash/margin/Stock Connect), and what northbound funds are. Mandatory reading before buying A-shares.
HK and US Stocks · Going Offshore
Want to invest overseas? Learn the rules first: HK's T+0 round trips with T+2 settlement, no price limits but a volatility control mechanism, and the Stock Connect channel; US pre-market and after-hours sessions, T+1 settlement, circuit breakers, and fractional shares; then how to choose a broker, which funding channels are compliant, and what Chinese ADRs are. Key point: mainland capital faces heavy restrictions going offshore — compliance is always the first premise.
Stock Analysis Methods · The Toolkit
A three-layer breakdown of fundamentals — macro, industry, company — how to read the balance sheet, income statement, and cash flow statement, plus key metrics such as ROE, gross margin, and debt ratio; then the right use cases and pitfalls of PE, PB, PS, dividend yield, and DCF; finally the correct use of technical and news analysis, and the traps retail investors step on most — fraud signals, buying tops, chasing small and junk stocks. Only after finishing this article do you deserve to say you "research stocks" rather than "guess direction".
ADR and Cross-Border Listing · The China-US Story
Why Chinese companies trade in the US, and what exactly you own when you buy BABA/PDD: the issuance mechanics of ADRs and the role of depositary banks, the 1 ADR = N shares conversion logic, then the full history from the 2000 portal listings, the 2014 Alibaba IPO, and the 2021 regulatory storm (the Didi affair and the audit working-paper dispute) to the 2023 PCAOB agreement; followed by ADR vs ordinary-share premiums and discounts, the difference between dual primary and secondary listings, the legal risks of red-chip and VIE structures, and finally a comparison of the three access routes — US brokers, Stock Connect, QDII — plus risks unique to Chinese ADRs. Mandatory reading before buying Chinese ADRs; compliance is always the first premise.
US Stock Options Primer · Seller Beware
A hands-on, US-market upgrade on top of the options basics: what the world's most active options market looks like, the practical exercise differences between single-stock (American) and index (European) Options, and how to read an option chain; then four beginner strategies worked out with real numbers — the Covered Call, the Protective Put, the Cash-Secured Put, and the Bull Call Spread; plus the US-only permission tiers (Tier 1-4), margin and tax basics, and the classic ways to die — naked-short blow-ups, lottery tickets expiring worthless, liquidity slippage. Seller risk is the focus — if you cannot read the obligations, do not invest a cent.
US and Global ETF Portfolio Construction · Buy, Hold, Rebalance
A practical global asset-allocation manual for ordinary investors: the SPY/VOO/IVV fee comparison, cheaper QQQ alternatives, and a one-page list of style/sector/global/bond/commodity ETFs; then the US versions of the three-fund portfolio (VTI+VXUS+BND) and the permanent portfolio (stocks + long Treasuries + gold + cash) with worked rebalancing numbers; finally DCA practice (brokers, funding, FX, the 30% dividend withholding), the math of DCA vs lump sum, and a portfolio health checklist. Hold long term at the lowest fees, the deepest liquidity, and the least hassle — do not churn.
Learning Order
① Stock basics (essence and indexes first)
↓
② A-share trading rules (the home battlefield — master it first)
↓
③ HK and US stocks (rules and compliance before going offshore)
↓
④ Stock analysis methods (tools in hand, then talk research)- ② and ③ can be taken in either order, but both rest on the concepts of ①.
- ④ is a lifelong exercise — reread it repeatedly after finishing the first three articles.
- After this chapter, continue along the knowledge-base roadmap: Futures (the chapter where leverage magnifies risk — mandatory reading) → Crypto Perpetuals.
Conventions
- Figures for price limits, fees, and thresholds follow the 2025-2026 rules as closely as possible, but rules change at any time — always defer to the latest announcements of the exchanges and regulators.
- Every risk-related section carries an "⚠️ Risk Warning" box.
- Prices in the examples exist to illustrate the math and do not represent trading advice of any kind.