協助及指引

1. What are low-priced U.S. stocks?

Low-priced U.S. stocks usually refer to stocks with a lower price per share. According to uSmart, stocks trading below $1 are considered low-priced. These stocks are typically issued by smaller companies and may be traded over-the-counter (OTC) or listed on some major exchanges.

2. What are small-cap U.S. stocks?

Small-cap U.S. stocks (or micro-cap U.S. stocks) generally refer to stocks of companies with a total market value of no more than $300 million. These companies are usually smaller, may be in the early stages of development, or face certain business challenges.

3. Why are low-priced U.S. stocks and small-cap U.S. stocks riskier to trade?

a. Liquidity risk

These stocks usually have low trading volumes, with few buyers and sellers. It can be hard for investors to buy or sell at their desired price or time, leading to higher trading costs (like wider bid-ask spreads), and they might even incur losses if they can't close their positions.

b. High volatility risk

Low-priced and small-cap stocks can have unlimited daily price swings, and their prices can be heavily affected by a small amount of money. They might surge or crash in a short time, making them riskier investments.

c. Information asymmetry and lack of transparency

Many small-cap companies don't have to submit detailed regular financial reports to the SEC, so public information is limited. Investors find it hard to fully assess the company's financial health, business outlook, and management capabilities, making them more vulnerable to false information or market rumors.

d. Easily Manipulated by the Market

Due to low liquidity and relatively weak regulatory oversight, these stocks are prone to market manipulation. A common tactic is the “pump and dump” scheme, where scammers hype up the stock price through false promotion and then sell off, causing other investors who follow to suffer losses.

e. Higher Risk of Delisting

Companies with poor performance or very low market value may face the risk of being delisted. Once delisted, the stock’s liquidity could worsen even more, making it hard for investors to sell their holdings.

4. Current Trading Restrictions

Based on the risks mentioned above, clients may face the following trading restrictions: 

• cannot buy, sell, or short U.S. stocks priced below $1.
• cannot buy, sell, or short U.S. stocks and related derivatives with a market cap of no more than $300 million.

These measures are designed to help manage risks from insufficient liquidity or market disorder, and to protect investors' interests. 

5. Important Reminder

Investing in low-priced and small-cap stocks may offer high return expectations, but they also come with a very high risk of losing your principal. Please carefully assess your own risk tolerance and investment goals before trading. 

We will continue to monitor market developments and update related information on our website in a timely manner. If you have any questions, feel free to contact our customer service team anytime.