Who Are the Best Online Brokerages for Trading Stocks in China?

Who Are the Best Online Brokerages for Trading Stocks in China?

by February 16, 2022

That’s the question I often ask my friends, colleagues and readers of this blog.

It’s a complex question to answer because what constitutes ‘best’ is not merely about fees or commissions. It frequently changes as new online brokerages enter or leave the market to make things harder still.

So rather than offering a specific answer regarding which one is right for you, I’m going to try to paint a broad-brush picture of who offers what based on my own experience, plus conversations with various investors both here in China and overseas.

How much does an online brokerage cost?

The short answer: It depends. For many people, fees are not the first thing on their minds when considering an online brokerage. But as I’ll explain shortly, how much you pay matters a lot.

The longer answer: Like many things in China, fees vary widely between different brokerages and depend mainly on what kind of trading activity you engage in. If you’re buying and holding stocks over the long term, then no-transaction-fee (NTF) models like those offered by A:C:M and Hexindai (formerly SHExchange ) are attractive because they allow you to avoid additional service charges for each transaction.

Those costs can add up quickly, so if you plan to hold several thousand dollars worth of shares for years at a time, NTF might be right for you.

However, if you’re an active trader buying and selling individual stocks multiple times a month, then transaction fees are less important than the actual price at which you buy or sell each stock. So while free trades are always lovely, they might not be enough to make up for other deficiencies in the service.

Who is Saxo Bank China?

Saxo Bank was founded in 1992 and started its online brokerage service in 1997. It is one of the most trusted brokers in Denmark, with many successful years serving thousands of traders worldwide.

Saxo Bank’s Chinese website shows that it offers 40 commission-free ETFs, BTC/USD trading on the Shanghai Gold Exchange, and access to news from Reuters China, which gives traders a wide range of tools for binary options trades.

Saxo Bank

Saxo Bank

What’s the real difference between A:C:M and Hexindai?

They both seem identical to me. Up until recently, that was probably true. Both companies have NTF models, detailed how-to guides on their websites for foreigners eager to get started trading stocks, apps available on Apple Store & Google Play, etc. And because everything worked so well across their respective sites, many people didn’t even bother to consider the distinction between A:C:M and Hexindai.

But subtle differences have emerged over the past year, which could make one service a better choice for you than another. For example, while both firms offer stock trading accounts, only Hexindai lets foreigners add cash to their accounts via an online money transfer service like Alipay or WeChat Wallet. It makes it much easier for non-Chinese speakers to get funds into their account in a matter of minutes, rather than having to wait several days for a wire transfer from overseas.

Also, suppose you’re looking to buy and sell stocks outside China to take advantage of arbitrage opportunities (such as price discrepancies between the same stocks listed on two different exchanges) or to transfer funds back into your home account. In that case, only A:C:M supports this functionality at the moment.

What are A:C:M and Hexindai?

Unless you’ve been hiding under a rock recently, chances are you’re already familiar with both companies (who boast 200K+ & 300K+ users on their respective forums ). But if not, here’s an introduction to each service.

A:C:M is China’s oldest online brokerage community. It began life in 2005 as ‘Warrillow Investment Network’ but closed temporarily in 2009 following Xi Jinping’s crackdown on private capital leaving the country. However, it re-opened just months later under its current name and today boasts a userbase of over 200K people.

Hexindai is relatively new to the investment scene but has quickly earned a reputation as one ofChina’s most innovative financial service providers. It began life in 2012 as ‘SHExchange’ and got its first round of funding from CA-Jinchen & SEEC Media Group in 2014.

Today, Hexindai claims over 300K users, many of whom have been drawn by its other weekly events such as stock quizzes and credit card rewards programs.

So which brokerage should I choose?

In the end, it all depends on what kind of trader you are. If you’re looking for something simple, with a few frills attached, an NTF model might be perfect for you.

If you’re an active trader looking to take advantage of price discrepancies in the market, then Hexindai’s continual investment program could be ideal. And if you want a brokerage that understands traditional finance and cutting-edge technology, A:C: M is probably the safest choice.

But whatever broker you do decide to go with, remember these key points:

  • You don’t have to choose one or another – Many people use both services depending on their needs at specific points in time.
  • You can open two accounts from each service without difficulty (for example, I have one account at A:C:M and one at Hexindai).
  • Platforms are constantly improving. So while your initial experience may be rocky, things should improve over time as the company adds new features and functions to your account.

Most importantly, do not rely on online forums if you’re looking for any investment advice or guidance. You’ll be far better off speaking with a professional who can help answer any questions you may have & understand what suits your style best. And luckily, both A:C:M and Hexindai provide such services as part of their standard packages.

And finally …

The choice is up to you. Don’t let others make it for you based on hearsay evidence, rumours, personal opinions etc. Instead, think about your needs and preferences and ask yourself whether the brokerage will see your unique needs.