Grey Market

What is Grey Market?

Grey market is an over-the-counter market, where new IPO issues are traded after normal trading hours one business day prior to the listing date. Hong Kong shares are generally traded by the matching system of HKEx during trading hours but grey market refers to transactions matched by the systems of designated brokerage firms instead of the trading system of HKEx. 


Advantages of Grey Market

1. Lock in Profits

If the performance of the IPO in grey market is overwhelming, investors with allotted shares can sell ahead of time to lock in profits.

2. Stop Loss in Time

If there are unfavorable news or the performance of grey market is unsatisfactory, you can sell in advance and reduce the risk of further price dropping on listing date.

3. Buy Extra Shares

Investors with little, nil or insufficient allotment can buy extra shares prior the official listing date in grey market. You may even buy in discount as you can set your price lower than the final offer price.

4. Act as an Indicator

The performance of grey market can provide a reference for the trend of share after listing. The ups and downs reflect the popularity of the new stock to a certain extent. Generally speaking, a higher price with a large trading volume in grey market may indicate a high popularity in the market and thus a greater probability of good performance on the first day of listing.

5. Transfer of Risk

New stocks with larger market caps usually have sponsors to stabilize the price on the first day of listing. If the share price in grey market drops significantly, you may buy new stocks and capture the potential profits.

Trading Hours of Grey Market

The trading day of grey market is one business day prior to the listing date of the new shares, trading hours are as below:


Trading Arrangement of Tropical Cyclone Warning Signal or Black Rainstorm:

In the case of tropical cyclone warning signal number 8 or above or black rainstorm signal:

1. Signal discontinued before 12:00 noon: grey market trading sections will begin as normal at 4:15pm (half trading day will start at 2:15pm)

2. Signal lowered after 12:00 noon: no trading for the day

3. If the signal is issued during grey market trading session, it will trade as normal until 6:30pm (half trading day ends at 4:30pm)

How to Trade in Grey Market?

Our company provides grey market trading services for clients in both web based internet channel (iTrade) and mobile App (General Version). If you would like to activate this service, please do not hesitate to contact your account managers. 

Please note that our company may revise the above trading arrangements at any time without notice.