A Singapore stock account with a difference

Since I left the brokerage industry way back in 2012, I was no longer able to assist my website visitors who wish to open a trading account in Singapore as I wasn't sure if they will be in good hands once they are signed up.

Since your first stock account could either make or break your view towards stock investments, be sure to find out which type of stock account in Singapore is suitable for your needs

When I started out…

I opened my first trading account in 2003. I was given an account number and a password. The rest is Do-It-Yourself.

How to use the trading platform? What stocks to buy? What happens after I buy a stock? How soon can I get my money after selling the stock?

There were some brochures and a generic telephone number to call. But somehow I can’t seem to get the answers I needed.

When I look for a trading account service these days, the most important aspect is the level of customer support and I'm impressed by what I've experienced so far. With IG, I was able to get my enquires answered almost immediately via their 24-hour live chat customer support. 

A Singapore Trading Account Platform

After opening a trading account to trade Singapore stocks, there's still a hurdle to get through and that is understanding your brokers' execution platform.

Don't be intimidated by the platform with all its blinking rows and columns after you are logged in because once I walk you through the essential element that you must understand to avoid unnecessary execution-related mistakes, it's going to be a breeze with your next orders.

The trade execution platform for most brokers are similar.  I'll be using IG market's execution platform to illustrate the essential element, the order ticket, below.

Order Ticket

There are five parts to this order ticket.

Section 1: Stock Details

This section gives you the basic information on the stock you are trading. These basic information may include stock name, current price, change in price compared to the trading day before, highest & lowest prices reached within the day, stock code/ ticker, etc

In this example, the stock is M1 and the current price is 2.03, 0.49% decrease in  share price compared to the last trading session, highest & lowest prices reached for the day are 2.05 and 2.03 respectively .

Section 2: Market Depth

The market depth allows you to see current 'demand' and 'supply' of the stock at different price levels. In the first (orange) row for example, there are 27,000 shares queuing to buy M1 at $2.03. At the same time, there are 14,300 shares queuing to sell M1 at $2.04.

When the buy orders at $2.03 are filled, the market depth changes as below.

Now, there are 74,400 shares queuing to buy M1 at $2.02 and 77,800 shares queuing to sell M1 at $2.03

 Section 3: Buy, Sell or Short Sell

This section determines the action you want to take on your stock. 'Buy' if you think the stock will go higher, 'sell' if you are taking or profit or cutting a loss, or 'short sell' if you think the stock is overpriced.

Section 4: Order type

For a start, you only need to know one type of order and that is the limit order. By definition, it means 'an order to be executed at a specific price or better'

For example, if the maximum price you are willing to pay for a share is $2.03 per share, then the market will fill your limit order at $2.03 or lower (e.g. 2.02, 2.01 if market conditions allow) .

Section 5: Price and Quantity

There are certain rules in setting your price and quantity in the Singapore stock market. 

Price (Order Level)

Source : SGX-ST rules

A 'bid' simply means ' an offer to buy'.

The minimum bid size for stocks under $0.20 per share must be offered in increments of  $0.001. e.g. 0.167, 0.168, 0.169, etc

For stocks priced between $0.20 and $1.995, the minimum bid size must be in increments  of $0.005 e.g. 0.305, 0.310, 0.315, or 1.625,1.63, 1.635, etc

For stocks priced above $2.00, minimum bid size must be 2.01, 2.02, 2.03, etc.

In addition, the price range that you can 'offer to buy' or 'offer to sell' has to be within 20 bids from last done price. For example, if the last done price of a stock is 2.20, the lowest price you can queue to buy is 2.00 and the highest price you can queue to sell is 2.40.

If the last done price of a stock is 2.03, the highest 'offer to sell' is 2.23 but the lowest 'offer to buy' is 1.915 because

2.02, 2.01, 2.00, (bid increment changes $0.01 to $0.005) 1.995, 1.99, 1.985, 1.98, 1.975, 1.97, 1.965, 1.96, 1.955, 1.95, 1.945, 1.94, 1.935, 1.93, 1.925, 1.92, 1.915 (20th bid)

Quantity (Shares)

The minimum number of shares you must buy or sell in the Singapore stock market with your trading account is 100 shares. So never enter an order to buy 1,976 shares for example. The correct quantity could either be 1,900 shares or 2,000 shares.

If you have an order to buy 10,000 shares of a stock but there are limited sellers at the current price, your order may be filled partially e.g. 9700 shares filled but never 9,721 shares for example.

Learning by Doing

Don't worry if you don't have a full understanding even after reading my breakdown explanation. It's really easy to use an order ticket.

In fact, it's actually more difficult for me to break down the order ticket and post on the website  :)

After reading all that I have written, nothing beats learning by doing. Decide on what type of stock account is suitable for your needs and start gaining experience!

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