US Stock Bonus Shares Explained: Understanding Stock Dividend Distribution in the US Market
<div data-page-id="WcnXdqL3voKWSSxgw0Guk9p3s1g" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-IXyTdPPqvo5abAxZApWuexKCs5d"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-XLLcdOAfGoVE1TxGHXfuYxrKsVU" data-list="bullet"><div><span style="font-size: 16px;">US stock trading accounts are available to global investors and can typically be opened online with basic documents such as a passport, proof of address, and proof of funds.</span></div></li><li class="ace-line ace-line old-record-id-KDSSdifxqoGCMDxbdl9uNMOhsZe" data-list="bullet"><div><span style="font-size: 16px;">Most major brokerages offer commission-free stock trading and no minimum account opening requirements.</span></div></li><li class="ace-line ace-line old-record-id-MjPZdcqQVoCoH9x55OPuvEN0s2g" data-list="bullet"><div><span style="font-size: 16px;">Funding options include wire transfers, bank transfers, and multi-currency services.</span></div></li><li class="ace-line ace-line old-record-id-I0fydk7QtoFX5Vxt6xyuXLTisjb" data-list="bullet"><div><span style="font-size: 16px;">Non-US residents are generally required to submit Form W-8BEN to qualify for applicable tax treaty benefits.</span></div></li></ul><div class="ace-line ace-line old-record-id-Oq5odGl8BoKQc4xcayMumRNVs7j"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Te8XdZhS4oJus0xlgAbuA8E4sjh"><strong>1. What Is a US Stock Trading Account?</strong></h2><div class="ace-line ace-line old-record-id-BpVTdf3dfoLw9XxFWGBuzoY6sNe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-F1t3dUFmKoQCqTxBX0HuW8eNsAc"><span style="font-size: 16px;">A US stock trading account is the primary tool investors use to access the US securities market. Through this account, investors can buy stocks, exchange-traded funds (ETFs), and other financial products listed on exchanges such as the <a data-lark-is-custom="true" href="https://www.nyse.com/index">New York Stock Exchange</a> and <a data-lark-is-custom="true" href="https://www.nasdaq.com/">Nasdaq</a>.</span></div><div class="ace-line ace-line old-record-id-Z8z9dsXnWohFrjxdpfjufdk4sFd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TicudKIBUoiBwmxO5qqujlrQsEU"><span style="font-size: 16px;">The US stock market is home to many globally recognized companies across sectors including technology, consumer goods, and healthcare. Unlike some traditional stock markets, US stocks can often be purchased starting from a single share, making them more accessible to beginner investors with limited capital.</span></div><div class="ace-line ace-line old-record-id-Gi4GdwLkKodlfHxozEBuIK2Js3g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VMiede0vnoocrSxbeYcuPEFQsqg"><span style="font-size: 16px;">For investors looking to build a globally diversified portfolio, opening a US stock trading account is an important first step.</span></div><div class="ace-line ace-line old-record-id-VUgMdIz0DouF2rxS6cku0vdwsBk"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LPTgdTFRioMZbuxPze7uiMW0sBc"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></span>*</span></div><div class="ace-line ace-line old-record-id-ImxNdAA9vokWysxJ6KAuOwclsVb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-KdAQd6Ig5ojDH7x9WQTu6Tzssif"><strong>2. How to Choose the Right Brokerage Platform</strong></h2><div class="ace-line ace-line old-record-id-LLVddwhwuoSzkHx9CgKutz6psCd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EBXmdM44SoBkiGxQFTGuIIpPsDe"><span style="font-size: 16px;">Selecting a brokerage is the first step in opening a US stock trading account. The following factors are worth considering:</span></div><div class="ace-line ace-line old-record-id-HmxEdPXfho5eqlxe4o9uKjC9sdm"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AfRDdh0yuoT6zHxlT76uPSeGsNc"><span style="font-size: 16px;"><strong>Fee transparency:</strong> Quality brokerages typically provide a clear fee structure covering trading commissions, foreign exchange fees, and account maintenance fees. Many leading platforms now offer commission-free stock trading.</span></div><div class="ace-line ace-line old-record-id-HzgPdTyQuobLrbxDcibunVwYsVB"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OO0ldsGLYoyzooxqYQYuhjITsid"><span style="font-size: 16px;"><strong>Account options:</strong> Depending on your needs, you may choose an individual account, joint account, or trust account. Different account types serve different investment and tax-planning objectives.</span></div><div class="ace-line ace-line old-record-id-I00IdNEjSoA1PHxSOJquMymts5e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ILL2dmlquoloLRxtdPwuXzA4skh"><span style="font-size: 16px;"><strong>Platform features and usability:</strong> Beginners should prioritize platforms with intuitive interfaces and easy-to-use tools. Real-time market data, charting tools, and mobile apps are all important considerations.</span></div><div class="ace-line ace-line old-record-id-OqY8dZXCtoiS99xtkE7ul7sYsdd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VK5XdrPxlokCesx3owpusgvfsLg"><span style="font-size: 16px;"><strong>Customer support:</strong> Responsive customer service, educational materials, and FAQs can be especially valuable for users whose first language is not English.</span></div><div class="ace-line ace-line old-record-id-HNzGd1OyvopM0DxhX2rumtLms0g"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-LAfqd33pMo1UNrxLSWAu5UGbs6e"><strong>3. Step-by-Step Guide to Opening a US Stock Trading Account</strong></h2><div class="ace-line ace-line old-record-id-Yx5kdBMZsoFuzrxUjlBum564suh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SyK4dSPFuo1EHUxQvZNurXLzsMd"><span style="font-size: 16px;">Step 1: Choose an account type</span></h3><div class="ace-line ace-line old-record-id-EGZpdLk3MoApPnxPVjQu4GyRsev"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Yt7WdFoNTozzyexIcZvuPT7dsEh"><span style="font-size: 16px;">Most individual investors open a standard brokerage account, also known as a taxable account. These accounts generally have no contribution limits and allow flexible deposits and withdrawals. Investors planning for retirement may also consider tax-advantaged retirement accounts where available.</span></div><div class="ace-line ace-line old-record-id-SZEtdjlRrow4a7xEPfqu0p4as9c"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-YtE2dYJbmoQItLxB6XmuP5xRs9e"><span style="font-size: 16px;">Step 2: Prepare the required documents</span></h3><div class="ace-line ace-line old-record-id-Pu5pdrJaJo9DZRxtCmzuj2sPslc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FcP5d8Wa3ohQT1xn8rEu0F64sSK"><span style="font-size: 16px;">Common account-opening documents include:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-TSOrdCmu0ok8HgxVatluuPbYsrb" data-list="bullet"><div><span style="font-size: 16px;">A valid passport for identity verification</span></div></li><li class="ace-line ace-line old-record-id-Buj5dYswQoPVjwxNUhrufj1HsEL" data-list="bullet"><div><span style="font-size: 16px;">Proof of address, such as a utility bill or bank statement</span></div></li><li class="ace-line ace-line old-record-id-RiDcd3I7soJNOKxLnRnuHjCrsFe" data-list="bullet"><div><span style="font-size: 16px;">Personal information, including name, date of birth, and contact details</span></div></li><li class="ace-line ace-line old-record-id-AAnPdk36mogzIJxrK4quNGJtsVb" data-list="bullet"><div><span style="font-size: 16px;">Employment information</span></div></li></ul><div class="ace-line ace-line old-record-id-ZN42dsA0jowhr9x6PdfuXh7jsud"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-V20edyUnto9AbRxauAbuUdYJsgc"><span style="font-size: 16px;">Step 3: Submit an online application</span></h3><div class="ace-line ace-line old-record-id-CqAbd5pfGoduYfxNl3YuYS6lsCf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UImxdwYcHo1Dl9xr946uSJmZsDg"><span style="font-size: 16px;">Visit the brokerage's website or download its mobile app and complete the application process by following the instructions provided. Most applications can be completed within 10 to 15 minutes.</span></div><div class="ace-line ace-line old-record-id-KO8tdb4rko4DgExpca2uYAiWsMd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-KbLydKzBWoyKhLx7DxnuqVdxsuc"><span style="font-size: 16px;">Step 4: Complete identity verification</span></h3><div class="ace-line ace-line old-record-id-KzHzdx5qNouzU4xAqYqurBlnstu"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W2VCdt8QUo2OjixHfxoumYIGskh"><span style="font-size: 16px;">Upload a passport photo or scanned copy. Some platforms may also require video verification or additional supporting documents.</span></div><div class="ace-line ace-line old-record-id-MG8BdfiKIoMdbixMZM6uaA9CsAd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TdqFd3nRXoZPsAxlp62uC7XHs2f"><span style="font-size: 16px;">Step 5: Submit tax forms</span></h3><div class="ace-line ace-line old-record-id-XbS4d7AQVoKY9mxfaV1utd8uscf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XdyKdrlqBo9UTIxqANtuJTdfsdh"><span style="font-size: 16px;">Non-US residents are generally required to complete Form W-8BEN to certify their foreign tax status. This form may help investors qualify for reduced dividend withholding tax rates under applicable tax treaties.</span></div><div class="ace-line ace-line old-record-id-LgMQdkfktokDhTxFwwnuDIijsdh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-E37DdR2sVoeBNBxo5JwuWc04szh"><strong>4. Funding Your US Stock Trading Account</strong></h2><div class="ace-line ace-line old-record-id-JV02dI9nuoEEHAxeHZ6uUtejsyh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ErxvdgtIuoEMHIxkKJ1u8Y9zsYc"><span style="font-size: 16px;">Once your account is approved, you will need to fund it before you can begin trading.</span></div><div class="ace-line ace-line old-record-id-UAVWdNFT4oxj2axem1UuGCbxszh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UVWGdOnaJoMigzx3RPsu8stQs2b"><span style="font-size: 16px;"><strong>International wire transfer</strong>: This is one of the most common funding methods for international investors. Funds are transferred from a local bank account to the brokerage's designated bank account. Processing typically takes one to four business days and may involve intermediary bank fees.</span></div><div class="ace-line ace-line old-record-id-V5r3dKm2lo3v3vx8uNiuCKkqsDj"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Cy1Kd5TjJovbgrxnprxucg0Nskc"><span style="font-size: 16px;"><strong>Linked bank account</strong>: Investors with a US bank account may be able to link it directly to their brokerage account for faster transfers.</span></div><div class="ace-line ace-line old-record-id-DBlldKXqaoOCw8x0oAcuseVWsee"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-E7EjdBzsIoNkv5xVpt2uevv1sGd"><span style="font-size: 16px;"><strong>Multi-currency services</strong>:Some brokerages offer multi-currency accounts, allowing investors to deposit local currencies while the platform handles currency conversion automatically.</span></div><div class="ace-line ace-line old-record-id-KYqfdzJzYom5zFxtgd1uu8vpsTg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CyyEdaAVOoeAZpxmdY5ub7dbsoh"><span style="font-size: 16px;"><strong>Check deposit</strong>:Certain brokerages accept check deposits, although processing times are generally longer.</span></div><div class="ace-line ace-line old-record-id-AkyadFmlYoUXWBx3cvDuiuPEsgd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PMKDdXP8sou1L9xX8wvubvZrsUd"><span style="font-size: 16px;">Once funds are credited to the account, investors can begin researching and trading stocks.</span></div><div class="ace-line ace-line old-record-id-HXQ4dGVUroWqwXxDeVxuXEZzssc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-R8VKdp7MLolv6XxJ5Voue3fdsHg"><strong>5. Tax Considerations for US Stock Investing</strong></h2><div class="ace-line ace-line old-record-id-UIgkdb6NFoR2qTxYuXmubXwuskM"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BnIFdn3UyoYuy9xWgcfuH6CWszc"><span style="font-size: 16px;">Understanding tax obligations is an important part of investing in US stocks.</span></div><div class="ace-line ace-line old-record-id-QtlHdDXYAoL1LSxX8pAucdb4sbY"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IwcPdRknxoGSjMxvCcfuZNmZski"><span style="font-size: 16px;"><strong>Dividend tax</strong>: Dividends paid to non-US residents are generally subject to a 30% withholding tax. Investors residing in countries with tax treaties with the United States may qualify for reduced rates.</span></div><div class="ace-line ace-line old-record-id-W5dBd9s76o1ceIxmbEkuMh5xsdh"><span style="font-size: 16px;"><strong>Capital gains tax</strong>: In general, non-US residents are not subject to US capital gains tax when selling US stocks. However, they may still have reporting obligations under the tax laws of their home country.</span></div><div class="ace-line ace-line old-record-id-GOKidF7qZo555sxzGRhuJgWzsDg"><span style="font-size: 16px;"><strong>Tax form renewal</strong>:Form W-8BEN is generally valid for three years and must be renewed upon expiration. Brokerages typically notify investors before the form expires.</span></div><div class="ace-line ace-line old-record-id-J5JtdSrQmoEYI9xbaukuWFResYd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-CuDWdHGJvonFhoxdLP9u6Xzisl5"><strong>6. Minimum Requirements for Opening a US Stock Trading Account</strong></h2><div class="ace-line ace-line old-record-id-CMpSdJo0FooJflxGeupuNLpMsJe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UQmcdikCPojNrFxhjTIue9FOsAh"><span style="font-size: 16px;">Different account types may have different funding requirements.</span></div><div class="ace-line ace-line old-record-id-KJzwd37YAonZwaxbtcSu8hjbs0f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WPmWdkyb8oINFMxGBNEuFAfJsdd"><span style="font-size: 16px;"><strong>Cash accounts</strong>:Most brokerages do not impose a minimum deposit requirement for cash accounts, allowing investors to start with relatively small amounts.</span></div><div class="ace-line ace-line old-record-id-O57SdtB2Vobr1kxrxnouMHgQsoe"><span style="font-size: 16px;"><strong>Margin accounts</strong>:Investors who wish to use margin trading typically need to maintain at least $2,000 in their account.</span></div><div class="ace-line ace-line old-record-id-FyW3d62TnoT5TKxHNJPuIIunsSc"><span style="font-size: 16px;"><strong>Futures trading accounts</strong>:Futures trading generally requires more capital and experience. New investors may wish to gain experience before considering Futures products.</span></div><div class="ace-line ace-line old-record-id-Hc1CdDLlzopyUjxpJgBumEiOsTf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-MKsdd1o2zohBk7xfVN0uO8lns7c"><span style="font-size: 16px;">Fractional share investing also allows users to purchase less than one full share, making it easier for beginners to start investing with limited funds.</span></div><div class="ace-line ace-line old-record-id-DuoVd93iXoh41Ix2WfeuKi5AsO2"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-DN6vdYIicoo0zqxOQuQulNIZs3f"><strong>7. Tips for Beginner US Stock Investors</strong></h2><div class="ace-line ace-line old-record-id-YwDFdGfV2oHsPrx9WkfuthKvsJf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Qlq8ditaBoO14Bxt22iuqsZCsph"><span style="font-size: 16px;"><strong>Diversify your investments</strong>: Avoid concentrating all capital in a single stock or sector. Diversifying across industries, regions, and asset classes can help reduce risk.</span></div><div class="ace-line ace-line old-record-id-C58qdija2of9ZFx9ox9usscxsnd"><span style="font-size: 16px;"><strong>Build a long-term strategy</strong>: Stock prices can be volatile in the short term. A disciplined approach, such as dollar-cost averaging, may help investors avoid emotional decision-making.</span></div><div class="ace-line ace-line old-record-id-U0DndMor4o3uEkxiV2bujUsvsQI"><span style="font-size: 16px;"><strong>Continue learning</strong>: Follow market developments, review company earnings reports, and make use of research tools and educational resources provided by your brokerage.</span></div><div class="ace-line ace-line old-record-id-Y1uRdYHhqoGSBfxbRAzuFKXEsjf"><span style="font-size: 16px;"><strong>Invest responsibly</strong>: Only invest funds that are not needed for daily living expenses or emergency savings.</span></div><div class="ace-line ace-line old-record-id-ZsQJdqyfpoMGX4xjfF8usTQlsqe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WSc4dcRD8odVRWx2xaUu67L2sye"><span style="font-size: 16px;">In addition to digital asset trading, MEXC users can also access US stock investing through MEXC's partner licensed broker, making it easier to build a diversified global portfolio.</span></div><div class="ace-line ace-line old-record-id-Clftdt3lYoJkl6xT3eYuJuNes5d"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-GmiPdZxYroYFHQxl0DuuM77qsud"><strong>8. Why Choose Direct Stock Market Access on MEXC</strong></h2><div class="ace-line ace-line old-record-id-OUFZdq1SfomZqHx0sp4uvbDqsAb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D67edZhiqofy4sx6h7MuVh6rsNn"><span style="font-size: 16px;"><strong>Streamlined account opening</strong>: Direct stock market access on MEXC offers a smooth KYC process that lowers the barrier to entry, allowing users to access the US stock market more efficiently.</span></div><div class="ace-line ace-line old-record-id-VycUdl4lCo8neHxKWJ7uDyVzsXc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-O0fWdKtfbo0cOBxtYbZuzThgsNe"><span style="font-size: 16px;"><strong>Real stock ownership</strong>: Users trade real US stocks denominated in USD, with the stock assets held in their own name. The platform supports buying, selling, and position management. Returns may come from both stock price appreciation and shareholder entitlements such as dividends.</span></div><div class="ace-line ace-line old-record-id-FzI8dsRCjoV6LwxeQ1CuUYYFssf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RfuvdSDY9odd5exCEyFujo1tswf"><span style="font-size: 16px;"><strong>Market data support</strong>: MEXC provides limited-time Level 1 real-time quotes and extended-hours market data. Eligible users may also receive real-time market data subsidies, helping them track market movements more accurately and make more informed trading decisions.</span></div><div class="ace-line ace-line old-record-id-LXjXd812ioL4gSxwxbWuaKIxsCh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-PsFGdvs8ho74SKxl4q5uR15NsXb"><strong>9. Opening a US Stock Trading Account FAQ</strong></h2><div class="ace-line ace-line old-record-id-L2uVdS7cyobc21xDj13uRgjCskf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-OavkdsUFrotNekxF4MjuPjCQsGc"><span style="font-size: 16px;">9.1 What is the minimum deposit required to open a US stock trading account?</span></h3><div class="ace-line ace-line old-record-id-PbhtdEmEnomiHkxEjwfupveRsah"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OCMYd6l9ioNrEzx2PnFuD2R3sm3"><span style="font-size: 16px;">Most brokerages do not require a minimum deposit for cash accounts. Margin accounts typically require at least $2,000, although requirements vary by broker.</span></div><div class="ace-line ace-line old-record-id-Y6JBdEzgsoVFs1xTEKuuyL84stb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EUpwd9TnXos0WxxOfGYuna4Qs1b"><span style="font-size: 16px;">9.2 How much capital is required for Futures trading?</span></h3><div class="ace-line ace-line old-record-id-Oa28dN2WtoWBNax42cguJcybsof"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Pnr8dqTLDonUmjxn089uWUllsqc"><span style="font-size: 16px;">Futures trading requires margin based on the specific contract being traded and the broker's requirements.</span></div><div class="ace-line ace-line old-record-id-SGGudsEpjoFDjpxWo6suBaUQsJb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-VOoCd4o8RoemlXxmc1MuCgfCshc"><span style="font-size: 16px;">9.3 Can I open a joint account?</span></h3><div class="ace-line ace-line old-record-id-LwBBdH97IoT2vkxOZrAuuneBsSf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V9gwdEUcuoYqqhxIIG3uvEZWsQe"><span style="font-size: 16px;">Yes. Most brokerages offer joint accounts for spouses or partners who wish to manage investments together.</span></div><div class="ace-line ace-line old-record-id-EML7dFjgXoZGVkxDTe3uS3hps6f"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JuTDd0QCkopAC4xl8GUumpnisUg"><span style="font-size: 16px;">9.4 Can someone under 18 open a trading account?</span></h3><div class="ace-line ace-line old-record-id-IWVAdeaMBo4SISxwVrOuSGvgsLf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KeFSdXu0UoIPb4xImPEulMZ3sPs"><span style="font-size: 16px;">Minors generally cannot open brokerage accounts independently. However, custodial accounts may be available through a parent or guardian.</span></div><div class="ace-line ace-line old-record-id-OwCGdcVCuo7Uamx2uW4uKR71spb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-AFdldUfuHoSZiyxNIljuT04qsse"><span style="font-size: 16px;">9.5 Can non-US residents living in Europe open an account?</span></h3><div class="ace-line ace-line old-record-id-JuQNd0uHeokbyLxwJI5uMOODsGg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BddNdCl2do48FuxWEfYuDFgvskg"><span style="font-size: 16px;">Yes. Many international brokerages provide account services for European residents who wish to invest in US markets.</span></div><div class="ace-line ace-line old-record-id-AoemdCRs9oOVzAxpUONuLLXHsrc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BmpTdjXscoJlTbxeTdsulUXIsPe"><span style="font-size: 16px;">9.6 How long does the account opening process take?</span></h3><div class="ace-line ace-line old-record-id-QEqtdr6fEozvv1xuvNRufmD9sKe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YYerd3H1Woxkv8xz03YuQ9Yvslh"><span style="font-size: 16px;">The online application typically takes 10 to 15 minutes to complete. Account approval generally takes one to three business days.</span></div><div class="ace-line ace-line old-record-id-SIemdCA04or2RmxqRgpuk4ihs38"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HMkKdIETpolgHnxWS9putjZrsVe"><span style="font-size: 16px;">9.7 How soon can I start trading after funding my account?</span></h3><div class="ace-line ace-line old-record-id-DxkZdpqi9oAMMQxXgXbu9B5Wslf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QtA1dwMg8o8oDIxj1sGufNdAsag"><span style="font-size: 16px;">Wire transfers typically take one to four business days to arrive. Once funds are credited, trading can begin. Some brokerages may impose a temporary holding period on newly deposited funds.</span></div><div class="ace-line ace-line old-record-id-WEnyddwM0oXPmJxQyOIuvjDgspc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-OAcaddnLWowS8lxF2KBueaHss4c"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-B4oVdzwRUoCPgvxYPmLuHo9Pstc" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/what-is-stocks-/1" style="font-size: 16px;">What Is Stocks?</a></div></li><li class="ace-line ace-line old-record-id-AxbfdMOEAooMVsxXRlBueUSEsic" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ</a></div></li><li class="ace-line ace-line old-record-id-FHd2dcKlGoZtLlxIGVruZP0Ks3c" data-list="bullet"><div><a href="https://www.mexc.com/support/article/corporate-actions-explained-378074245807356928" data-lark-is-custom="true" style="font-size: 16px;">Corporate Actions Explained: Stock Splits, Reverse Splits, Rights Issues, and Shareholder Meetings </a></div></li><li class="ace-line ace-line old-record-id-MloedhVuuokMmVxfNkAuLY6qsHh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stock-dividends-explained-375847313854307328" data-lark-is-custom="true" style="font-size: 16px;">US Stock Bonus Shares Explained: Understanding Stock Dividend Distribution in the US Market </a></div></li><li class="ace-line ace-line old-record-id-KlbOd0Bc5oCiMRxNURTuNnMQsFf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-are-stock-investment-gains-taxed-a-practical-guide-to-us-stock-tax-calculation-378076298801724416" data-lark-is-custom="true" style="font-size: 16px;">How Are Stock Investment Gains Taxed? A Practical Guide to U.S. Stock Tax Calculation </a></div></li></ul><div class="ace-line ace-line old-record-id-TbDQdgjTmoDtBIxUQOmuit0psid"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TkcYdpR32ogKAtx7MBuuzbMlshc"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-VZtZdEQrToXn6oxkjj5uCWX6ssh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-STeidNHI0oI8mAxt57Bu5UGjsWg"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-MPCSdlOeAolRO2xUwowuk6sQsZb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GIWsdstN9onSYnxmD8TuijaPsWb"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
Stock Dividends Explained: Bonus Shares, Key Rules, and Distribution Mechanism
<div data-page-id="NAxLdkwG3okrbixPTpWuuf39sih" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-P48Gd11bDo4vIpxNbwruT4cKskf"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-GspsdBAoUo9Ee4xlYk3unvFDsnf" data-list="bullet"><div><span style="font-size: 16px;">Bonus shares are additional shares distributed to existing shareholders at no cost and do not involve any cash payment.</span></div></li><li class="ace-line ace-line old-record-id-OA4odkRsAoWys8x7N9tuvzRUsRb" data-list="bullet"><div><span style="font-size: 16px;">After bonus shares are issued, the stock price is adjusted proportionally, while the investor's total market value remains unchanged.</span></div></li><li class="ace-line ace-line old-record-id-Q1CbdiRIBoeK5axa6pJu40bCssP" data-list="bullet"><div><span style="font-size: 16px;">Bonus shares and stock splits are different corporate actions, each serving different purposes.</span></div></li><li class="ace-line ace-line old-record-id-HALCdFptko7TPgxOiYHupo4ksmg" data-list="bullet"><div><span style="font-size: 16px;">In the US stock market, bonus shares generally do not create a tax liability when issued, although capital gains tax may apply when the shares are sold.</span></div></li><li class="ace-line ace-line old-record-id-Ja3qd7QTeoQEgaxAMNduPXJyseb" data-list="bullet"><div><span style="font-size: 16px;">Understanding corporate actions such as bonus issues through platforms like MEXC can help investors better evaluate market activity and long-term investment opportunities.</span></div></li></ul><div class="ace-line ace-line old-record-id-XP5fdDd36ot5GnxP4XruYvwasoh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-KxvQdAyjMoYMHSxnINau8hxasof"><strong>1. What Are Bonus Shares?</strong></h2><div class="ace-line ace-line old-record-id-KNjrdJE7QohhEgxIuOYuBhyBsod"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NBAQdEoofoNL3rxEA6LuLCrwsXf"><span style="font-size: 16px;">Bonus shares refer to additional shares distributed by a listed company to existing shareholders by capitalizing retained earnings or reserves. This practice is relatively common in the stock market and is one way companies reward shareholders.</span></div><div class="ace-line ace-line old-record-id-RKrWdNaPIoI9wqxVwLGutYN8sde"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HYDId0BwwoodPzxJXHNuGRIbsnc"><span style="font-size: 16px;">For example, if a company announces a 1-for-5 bonus issue, shareholders receive 1 additional share for every 5 shares they already own. An investor holding 100 shares would therefore own 120 shares after the bonus issue.</span></div><div class="ace-line ace-line old-record-id-TBrNd4V4moji3ix3UyVu3yUNsbh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JC7Zdmml0oSArixwwkyucScLs3g"><span style="font-size: 16px;">Bonus shares are issued from a company's retained earnings or capital reserves rather than through additional payments from shareholders. The newly issued shares are automatically credited to shareholders' brokerage accounts without requiring any action from investors.</span></div><div class="ace-line ace-line old-record-id-UKwLdFZ23oPVQGxQsYYun9NdsOd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CXAEdAwsUo7wBrxQUmXub9mlsuU"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></span>*</span></div><div class="ace-line ace-line old-record-id-TwkHduerSo7A3rx5Hl1uGA5asHf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-DDy1dUw3ToP0XDxnJV4uVuv1sng"><strong>2. How Bonus Shares Work</strong></h2><div class="ace-line ace-line old-record-id-TUUsdVklQoZAZ0x5ESDutWyYshh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UYNXdXE89owVYGxSqX4uT6mps1e"><span style="font-size: 16px;">2.1 Impact on Share Price</span></h3><div class="ace-line ace-line old-record-id-AgAadNCUqoZNmmxABj1ubGYHsHe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ZDJFdZ7AlotQv7xiycHu281wskb"><span style="font-size: 16px;">A bonus issue increases the total number of shares outstanding. Since the company's overall market capitalization generally remains unchanged immediately after the issuance, the share price is adjusted proportionally.</span></div><div class="ace-line ace-line old-record-id-QjrHdgdUzoMR2Xx1GAQuTBlbsNf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ij6VdGoZCoar1jxeHBhur8O9sgf"><span style="font-size: 16px;">For example, assume a company is trading at $100 per share and announces a 1-for-1 bonus issue. After the bonus issue, the number of shares held by investors doubles, while the share price adjusts to approximately $50. An investor who originally owned 10 shares worth $1,000 would then own 20 shares worth a total of $1,000.</span></div><div class="ace-line ace-line old-record-id-OIKFdsuBUouoQtxJJsHuGn7Isgb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EQ1cdFtoMo3U4zxochruiAs1sQg"><span style="font-size: 16px;">2.2 Impact on Investors</span></h3><div class="ace-line ace-line old-record-id-WznqdJWJMojkIjx7BSHugNBDs0O"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WNObdi2ibocmFsxEM8ruOJFXsWe"><span style="font-size: 16px;">A bonus issue does not immediately change the value of an investor's holdings, but it may have several indirect effects:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-I8Kjd43HloUdsUxoiTYuBDhHs1f" data-list="bullet"><div><span style="font-size: 16px;">Larger shareholdings may increase future dividend income if dividends per share are maintained.</span></div></li><li class="ace-line ace-line old-record-id-KkrhdXlcAo47PYxyLz7ucV08smh" data-list="bullet"><div><span style="font-size: 16px;">A lower share price may improve market accessibility and improve stock liquidity.</span></div></li><li class="ace-line ace-line old-record-id-S6zndATySoZFOyxaelKuAHphs9e" data-list="bullet"><div><span style="font-size: 16px;">Bonus issues are often viewed as a sign of a company's financial strength and may help boost investor confidence.</span></div></li></ul><div class="ace-line ace-line old-record-id-BZL6daIPxotemDxhsnXu5BxcsNc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-D0K8dSIdZoFveHxqfXEudcOysJc"><strong>3. Types of Bonus Shares</strong></h2><div class="ace-line ace-line old-record-id-X9KVde75VoREbixhMbjuSHrHshg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EWosdiHfCoqwFyxW6w1u9xkfs3c"><span style="font-size: 16px;"><strong>Fully Paid Bonus Shares:</strong> This is the most common form of bonus issue. The company distributes additional shares using retained earnings, capital reserves, or other reserves, and shareholders are not required to make any payment.</span></div><div class="ace-line ace-line old-record-id-QFscd2JQ9odd8LxgrwRu8FFTs9f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GvQidI7F0olhVxxiuCCuhCFjsfb"><span style="font-size: 16px;"><strong>Partly Paid Bonus Shares:</strong> This type is less common. Under this arrangement, partly paid shares are converted into fully paid shares through capitalization without requiring shareholders to pay the outstanding balance.</span></div><div class="ace-line ace-line old-record-id-X4fgdOLZPoiWUQxJFltu24e7sfd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-HTbBdwesQoG5hUxfuDXuP6bxsDh"><strong>4. Bonus Shares vs Stock Splits</strong></h2><div class="ace-line ace-line old-record-id-UsCLdlF1aofxkMxsbncu14L4s5c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QuNVdYIrgojYEzxDMYmuIvIjsFf"><span style="font-size: 16px;">Bonus issues and stock splits both increase the number of shares outstanding and reduce the share price proportionally, but they work differently.</span></div><div class="ace-line ace-line old-record-id-Xi7OdWqzFoCrUjxmfwTuIDy3sMc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V6p8dwMY6olFruxj7JhuT2BTsde"><span style="font-size: 16px;">A bonus issue converts company reserves into share capital and distributes additional shares to existing shareholders. The par value of each share remains unchanged. This process increases paid-up capital while reducing reserves.</span></div><div class="ace-line ace-line old-record-id-Pa2rdPy9jos5xJxp6tWuQNqpsHf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XPNidqpQ1o4l1LxJIjHudF38sDu"><span style="font-size: 16px;">A stock split divides existing shares into smaller units and reduces the par value proportionally. For example, in a 2-for-1 stock split, a share with a par value of $10 becomes two shares with a par value of $5 each. A stock split does not involve any transfer of reserves.</span></div><div class="ace-line ace-line old-record-id-I6Jtdk68rouWNNxqQT2uVwY4ssg"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="208;208;231" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="208"><col width="208"><col width="231"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-BxaDdZ9NboULBSxcj6QuAlZJs3f"><strong style="font-size: 16px;">Comparison</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-MCzVdV642oGZotxQVWJuNOPVsDc"><strong style="font-size: 16px;">Bonus Shares</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PP7tdZxIoo8WYsx5NFLurnAbsOe"><strong style="font-size: 16px;">Stock Split</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-COgzdBnKooNaE3xC2O0uVg8XsMf"><span style="font-size: 16px;">Par value per share</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-FMWvdFjJQoNjZTxjLJtuYxOusXf"><span style="font-size: 16px;">Unchanged</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-LM8LdzVx4opySQxUBTautQpQsBf"><span style="font-size: 16px;">Reduced proportionally</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-LhwbdnU6ZocE2ix7pQkuDf1fspe"><span style="font-size: 16px;">Impact on reserves</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Mrt1dY88don7nbxdu2su58pvscf"><span style="font-size: 16px;">Transferred to share capital</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UGTjdKyCNo1k3ZxYkhAupc4TsGg"><span style="font-size: 16px;">No change</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Zi9MdIXvgoZUdIxKrCvuDHBYsQg"><span style="font-size: 16px;">Paid-up capital</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-IUMGdMLUroTLLwxfAQ2uG7NPsob"><span style="font-size: 16px;">Increases</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-GiSKdkSIho2IaBxXU48uz1zLsab"><span style="font-size: 16px;">Unchanged</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ZqCGdIabDoO09Mxqtl0ugBMaszb"><span style="font-size: 16px;">Primary objective</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PMejdQ4D2obIqZxfqYKuUS9fsYb"><span style="font-size: 16px;">Reward shareholders</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-CEWpd70zWojS7lxF8X0ukza5smc"><span style="font-size: 16px;">Improve liquidity</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-Fm0vdQ5h7oMNKDxnCl7uK4b8sXg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-JL9jdN76roYiejxqE2SucRIjsAg"><strong>5. Bonus Shares vs Cash Dividends</strong></h2><div class="ace-line ace-line old-record-id-Vqs9dWQzqos4WRxutWzup4Eds8e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Hn7WdLggvo9BIuxLEH0u6XH5s8g"><span style="font-size: 16px;">Companies generally reward shareholders through two main methods: bonus shares and cash dividends. Each serves different investor needs.</span></div><div class="ace-line ace-line old-record-id-BiQFddApXoVDZXxiCrMutNIwsdb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NDKBd7Zsro5AngxKvXeu6fiTsyf"><span style="font-size: 16px;"><strong>Bonus shares</strong> increase the number of shares held by shareholders without generating immediate cash income. For long-term investors, bonus shares can help accumulate additional shares and support long-term compounding.</span></div><div class="ace-line ace-line old-record-id-TZygdPgHaoPXlTxDhPVuNf3ysOc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J9tqdjYiVo2hjfxuovGuqBgBsCd"><span style="font-size: 16px;"><strong>Cash dividends</strong>, by contrast, provide direct cash payments to shareholders and generate immediate income. This approach is often preferred by investors who require regular cash flow.</span></div><div class="ace-line ace-line old-record-id-Aq3rdol0zoC42ZxBQhluLge3sSd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JzredNcLDoIbjwxrG8lukHHKsyd"><span style="font-size: 16px;">From a tax perspective, bonus shares generally do not trigger a taxable event upon issuance. Capital gains tax may apply when the shares are sold. Cash dividends, however, are typically taxable when received.</span></div><div class="ace-line ace-line old-record-id-YtaKdzaJwomkE8xHyG1u3ToZsIf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-TilJd1SxzoJLHdxp7Nduz04lsYE"><strong>6. How Bonus Shares Affect Investment Decisions</strong></h2><div class="ace-line ace-line old-record-id-VeKddb4Ohoyw8kxIxLLuSTKQs9e"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SaO5d855zopvgsx4PDKuGfu7sGc"><span style="font-size: 16px;">6.1 Advantages of Bonus Shares</span></h3><div class="ace-line ace-line old-record-id-NPiZdzi2BoNPX2x5VTdusD4msxc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KEAqdjH97oZuPPxWwe3uQDYesLb"><span style="font-size: 16px;">For investors, bonus shares provide additional shares without requiring additional capital. Over time, repeated bonus issues can significantly increase the number of shares held.</span></div><div class="ace-line ace-line old-record-id-H7YUdzMJboAj2nx2qA9uvr4lswc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JqVddZq0VoenAwxADrpuzMwrs6f"><span style="font-size: 16px;">Bonus issues are also often viewed as a sign that a company has sufficient reserves and a healthy financial position.</span></div><div class="ace-line ace-line old-record-id-C1dLdNKJco2tCkxHICIujuJDsJb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HRGNdoSVdoqxo3xW0tYucNCxsLb"><span style="font-size: 16px;">For companies, bonus shares provide a way to reward shareholders without using cash while increasing the number of shares available for trading and improving market activity.</span></div><div class="ace-line ace-line old-record-id-Cweld1sagoMgdlxIckMu4CvIsWb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-A15kdMGMeoxqaOxKA0PuEoBdste"><span style="font-size: 16px;">6.2 Limitations of Bonus Shares</span></h3><div class="ace-line ace-line old-record-id-LUUwdsX2sogT2mxZ55FuWIbMsEg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JCTSdlCx5o8xp6xZMDZuDzrjsKf"><span style="font-size: 16px;">Bonus shares do not generate immediate economic gains because the overall value of the investment remains unchanged.</span></div><div class="ace-line ace-line old-record-id-MsbDdjsAAoguzhxK8gtuDd96sIe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-V03udktpaoJPkfx6WaLukvYxssd"><span style="font-size: 16px;">In addition, bonus issues dilute earnings per share and book value per share because the same earnings and net assets are spread across a larger number of shares.</span></div><div class="ace-line ace-line old-record-id-PIEldDfxWo0Rcwx4xOFuQocwsKc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Q6dRd2HBMoGrfgx436GuKxzusBb"><strong>7. Staying Informed Through MEXC</strong></h2><div class="ace-line ace-line old-record-id-B6gVdTrNNo7kwTxQkfguNxtpsGd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-C4eldD7zaoWC36x6yFDuxU06s7b"><span style="font-size: 16px;">Understanding how traditional financial markets operate is important for investors across all asset classes. As a professional trading platform, MEXC is committed to providing users with educational resources and market insights. Whether the topic is bonus shares, stock splits, or other corporate actions, understanding these concepts can help investors make more informed decisions.</span></div><div class="ace-line ace-line old-record-id-ABQYdHMsmoTeIuxrJOhuCASjsoV"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-YqoOdibb5o31RExW53HuUpQxsvh"><strong>8. Bonus Shares FAQ</strong></h2><div class="ace-line ace-line old-record-id-O2zadmLqzontE9xMW3AutFHPsGc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-U7BKdgaOgom6VtxfRM6uAUacsBe"><span style="font-size: 16px;">8.1 Which companies issue bonus shares?</span></h3><div class="ace-line ace-line old-record-id-BtYcdCasaoEdpkx0LEzuyDdzsvh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KDjadd1eDoCOU5xY9qnu01W4sbc"><span style="font-size: 16px;">Companies with sufficient reserves and stable profitability are generally more likely to issue bonus shares. Investors can find relevant information through company announcements and financial news platforms.</span></div><div class="ace-line ace-line old-record-id-YZ6tdxpM5o6z5NxlbAluaZELsjc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DH3ydlPgooNa8lxVh8cuzOGfsSK"><span style="font-size: 16px;">8.2 Which is better, bonus shares or stock splits?</span></h3><div class="ace-line ace-line old-record-id-DIR6dZ6K0oAPPPxxBywufdassud"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UOIzdki9to4yX7xQ59XuqBofsOh"><span style="font-size: 16px;">Neither is inherently better. Bonus shares indicate that a company has sufficient reserves, while stock splits are primarily intended to improve liquidity. Investors should evaluate each situation based on their investment objectives and the company's circumstances.</span></div><div class="ace-line ace-line old-record-id-DpMyda6q8oDqt7xuSUnuT06tsUf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-QJ1FdkFrIoidRqxhTXuuFQ7is6f"><span style="font-size: 16px;">8.3 Should I buy shares before or after a bonus issue?</span></h3><div class="ace-line ace-line old-record-id-ZqP0dAvLjoC1Ebxu9KuuxFJ6sle"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GwnId3MCRoDOx0xXMWTuxEynsrg"><span style="font-size: 16px;">A bonus issue alone does not change a company's underlying value. Investment decisions should primarily be based on company fundamentals, valuation, and growth prospects.</span></div><div class="ace-line ace-line old-record-id-PBcPdkEyfoStEnxj9ZBurfaMsub"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Kg2Zd01KwoLObHxMwBfu61dIsac"><span style="font-size: 16px;">8.4 Does the stock price fall after a bonus issue?</span></h3><div class="ace-line ace-line old-record-id-UQECdrKq6okkbdxWGQzu0pY5smh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YstIdS9E3o9L9uxvhVEuUH5xsgh"><span style="font-size: 16px;">Yes. The share price is adjusted downward proportionally after a bonus issue. However, this is a mechanical price adjustment, and the investor's total market value remains unchanged.</span></div><div class="ace-line ace-line old-record-id-UsbJdKK7goVk4TxW8jdu4ZgGszb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Iut0dPUjQoFCp6xgdpnutec3svc"><span style="font-size: 16px;">8.5 What is the difference between bonus shares and dividends?</span></h3><div class="ace-line ace-line old-record-id-KaCXdYGtqo8hdtxlbopulI0Xs4d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OW1Vdci2Cob8fMxpkBBujMu9ssB"><span style="font-size: 16px;">Bonus shares provide additional shares and do not involve cash payments. Dividends are direct cash distributions to shareholders. The two differ in structure, taxation, and cash flow impact.</span></div><div class="ace-line ace-line old-record-id-AGwVdhklWo6zpSxuaUkumw2XsNd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-RrNXd8uOXoxNJyxEyrAuZAobsFh"><span style="font-size: 16px;">8.6 What are the disadvantages of bonus shares?</span></h3><div class="ace-line ace-line old-record-id-NVsNd4LumooHxFxrbxgu26cAsgh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DXPfdHtIuoRxSZx8fjluEHX8sxh"><span style="font-size: 16px;">Potential drawbacks include the lack of immediate cash income, dilution of earnings per share, and the use of company reserves, which may reduce the company's flexibility for future distributions.</span></div><div class="ace-line ace-line old-record-id-CUSPdaGbkogOpyxDKu0upyzBsZf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Ylj2dnNDOoQ8FoxVvOHuH0rrspc"><strong>9. Conclusion</strong></h2><div class="ace-line ace-line old-record-id-NaR5d3ea0or1ACxl4hyu0zAvs9M"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-InfwdOZTQozxRYxQDoAuLscxsOK"><span style="font-size: 16px;">Bonus shares are a common corporate action in the stock market and an important concept for investors to understand. Whether investing in stocks or digital assets, understanding how bonus issues work can help investors better evaluate opportunities and market developments. MEXC continues to provide educational content to help investors build knowledge and make more informed decisions.</span></div><div class="ace-line ace-line old-record-id-JL1MdsM9JocdHGxWSequupBPslb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-M5PHdtU2HojU8sxaOOUufRBssag"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-LRiqdb4mUoEWF4x9XbCug8fKsBd" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-ZlO8d0JVro7nkMx391XubGyFsDk" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-L4Ppd0qMFoi9uUxY5uluFDUEsqh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-are-stock-investment-gains-taxed-a-practical-guide-to-us-stock-tax-calculation-378076298801724416" data-lark-is-custom="true" style="font-size: 16px;">How Are Stock Investment Gains Taxed? A Practical Guide to U.S. Stock Tax Calculation </a></div></li><li class="ace-line ace-line old-record-id-NZlydxFttoE6pAxyURduobkwspf" data-list="bullet"><div><a href="https://www.mexc.com/support/article/corporate-actions-explained-378074245807356928" data-lark-is-custom="true" style="font-size: 16px;">Corporate Actions Explained: Stock Splits, Reverse Splits, Rights Issues, and Shareholder Meetings </a></div></li><li class="ace-line ace-line old-record-id-GC4odoRZFojhY4xgvgZupHpZsOh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-bonus-shares-explained-378075302369310720" data-lark-is-custom="true" style="font-size: 16px;">How to Open a US Stock Trading Account: A Beginner's Guide </a></div></li></ul><div class="ace-line ace-line old-record-id-Ca6xd5R10owwHex4QGZumuG2sjr"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Me30d9jBWopGFsxb2MXuCNzrsTe"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-WZ4ndBDSLouKxyxe7CIufNrLs5b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KZ07dqfTLoVfVuxlrk9udjpAsWb"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-RIfBdU3IqoAEIgxR0lRu0IQas5g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-U4AmdRfhSosn5yx3GXou9YCWsvf"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div><div class="ace-line ace-line old-record-id-Mej5dDC6RogvKhxMRhFuFU7WsKc"><span style="font-size: 16px;"><br></span></div></div>
US Stock Dividends Explained: Ex-Dividend Dates, Payment Dates, and Key Rules
<div data-page-id="QmfodA5pXouYGKxmyIsuWgvYsGc" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-NIwTdrbAkoBgeWxyxxUu4h77sef"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-NzYpd31JnoO09Xx05xNu1clIsbc" data-list="bullet"><div><span style="font-size: 16px;">US stock dividends are a way for listed companies to distribute a portion of their profits to shareholders.</span></div></li><li class="ace-line ace-line old-record-id-HVUSd2CJMogM4ExNrUpuYGHts8d" data-list="bullet"><div><span style="font-size: 16px;">The dividend process involves four key dates: the declaration date, ex-dividend date, record date, and payment date.</span></div></li><li class="ace-line ace-line old-record-id-PDAodPKEfoQg4bxWXPyuYv06sib" data-list="bullet"><div><span style="font-size: 16px;">Most US companies pay dividends quarterly, while some use monthly or annual dividend schedules.</span></div></li><li class="ace-line ace-line old-record-id-DHxpd0FWDo9LZhxKIGqu5AoWsBF" data-list="bullet"><div><span style="font-size: 16px;">Non-US investors are generally subject to dividend withholding tax, with rates varying by country.</span></div></li><li class="ace-line ace-line old-record-id-LQcVdHF5losTs8xr7tquAeIxsdh" data-list="bullet"><div><span style="font-size: 16px;">Investors may choose to reinvest dividends to benefit from long-term compounding.</span></div></li></ul><div class="ace-line ace-line old-record-id-KMtRdmMY4olACVxtQALuMJFysGd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-K0LedPvuto8FafxBFXhujCKnsMc"><strong>1. What Are US Stock Dividends?</strong></h2><div class="ace-line ace-line old-record-id-PUP6dZi2xosa5nxE8bKum1kIs5f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XQe7db9BaoQBI7xx9TWuJw12sLb"><span style="font-size: 16px;">US stock dividends refer to the distribution of a portion of a listed company's profits to shareholders in the form of cash or additional shares, based on the number of shares held or as specified in the company's corporate policies. Dividends are one of the primary ways companies return value to shareholders.</span></div><div class="ace-line ace-line old-record-id-QQqAd2Js2o5oQkxcd0rud43vsUb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BQQydX7QnoSCUZxSHb2uBZcSssf"><span style="font-size: 16px;">Most US companies pay dividends on a quarterly basis, with cash dividends being the most common form. Companies with stable dividend policies are often favored by long-term investors.</span></div><div class="ace-line ace-line old-record-id-Yfgcdmoc2osPXTxKf24uf91isGf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VGLwdlK9LoUX0ExTrzBuQfclsIc"><span style="font-size: 16px;">It is important to note that dividends are not guaranteed. Companies may reduce or suspend dividend payments at any time. When making investment decisions, investors should evaluate the company's fundamentals, cash flow sustainability, and long-term earnings outlook rather than relying solely on dividend yield.</span></div><div class="ace-line ace-line old-record-id-J5MKd26fqogjwhxiV7MuauIwsCb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Rkg8dLeDEojT9rxuNBPu5IPgs2g"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-ADXGdALUcozYGMxaTvbudwRoswp"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-QGZQdi7CQoI2DUxnE16uova6sQh"><strong>2. Four Key Steps in the US Dividend Process</strong></h2><div class="ace-line ace-line old-record-id-OkksdyO6Vobl8kxy3TJu3SF6slg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Zg1td9xcDoAIYix0xnMu79XFsrg"><span style="font-size: 16px;">Step 1: Declaration date</span></h3><div class="ace-line ace-line old-record-id-QdeqdlPM7oqiEnxqCdguAbrTsxb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YF3rdAAEtob8h0xKseLu8Tnfsnh"><span style="font-size: 16px;">The declaration date is the date on which the company's board of directors formally announces a dividend. On this date, the company discloses important information such as the dividend amount per share, ex-dividend date, record date, and payment date.</span></div><div class="ace-line ace-line old-record-id-JQ5RdMOdcoOBnaxaEubuODhAs1Y"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AvC7dvVA8ol5BmxP7PTuJBTZsle"><span style="font-size: 16px;">Companies typically announce dividend plans after releasing quarterly earnings reports. The dividend amount is determined based on factors such as profitability, cash flow, and future development plans.</span></div><div class="ace-line ace-line old-record-id-R8BDdccs9oPx2MxHAfeufb70sbb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TbeqdchQ1oVn8hxwDaOuLi4XsMb"><span style="font-size: 16px;">Step 2: Ex-dividend date</span></h3><div class="ace-line ace-line old-record-id-Smk6dqewHoMLYpx7dd9uqLWWspe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W65ld7IN2ot52jxwbi2ul22Cs2b"><span style="font-size: 16px;">The ex-dividend date is the most important date in the dividend process. On the ex-dividend date, the stock typically opens lower by approximately the dividend amount.</span></div><div class="ace-line ace-line old-record-id-V7IMdlv4xoH58pxLtQDu5U3Fsog"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UCq6djzrgoPrBDx2JKnu8AuZsCd"><span style="font-size: 16px;">Investors who buy the stock on or after the ex-dividend date are not eligible to receive the upcoming dividend. Only shareholders who already own the stock before the ex-dividend date qualify for the payment.</span></div><div class="ace-line ace-line old-record-id-E7VwdY7mwoB5JYxMwEEu8SJaskf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GhFGdtEyLobwtAxS0hJurz5ZsZd"><span style="font-size: 16px;">For example, if a stock is trading at $10 and the company declares a $1 dividend per share, the stock price may adjust to approximately $9 on the ex-dividend date. If an investor holds 1,000 shares, they will receive $1,000 in cash dividends. In theory, the decline in the share price offsets the dividend payment, leaving the investor's overall position largely unchanged before taxes and market fluctuations.</span></div><div class="ace-line ace-line old-record-id-QmooduwwloadRmxHebiu5RvWsmh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LZwidVmkEoS5W9xz8C9uH5gRs5b"><span style="font-size: 16px;">Since US equities now operate on a T+1 settlement cycle, investors generally need to purchase shares before the ex-dividend date to qualify for the dividend.</span></div><div class="ace-line ace-line old-record-id-CvHPdmT6IogwDVx2W3Wuvmr7s02"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-PvXYddmILoznfuxmUTiuNY1bslg"><span style="font-size: 16px;">Step 3: Record date</span></h3><div class="ace-line ace-line old-record-id-DSoTdGA6dokBROxYOACuD4RlsGc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-C4TTdM0sioXsg7xP395utUw6sjh"><span style="font-size: 16px;">The record date is the date on which the company determines which shareholders are eligible to receive the dividend based on its shareholder register. The record date is usually set one to two business days after the ex-dividend date.</span></div><div class="ace-line ace-line old-record-id-RsbudHnTVoxJQBxfQqtuVEQasr2"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ZhwjdENTmoAZRvxRdbJuoGXCstg"><span style="font-size: 16px;">On this date, the company verifies shareholder records to ensure that dividends are distributed accurately and fairly.</span></div><div class="ace-line ace-line old-record-id-DzVUdsHh6oM4Q5xqyO1uwtKCsgm"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WYrvdXcvqo7kmoxCXmquzgdasUd"><span style="font-size: 16px;">Step 4: Payment date</span></h3><div class="ace-line ace-line old-record-id-UpNTd11Rronr7UxeUomunaFnsNf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PjOPd9wG9o6kO6xO1Eku8GxPs3c"><span style="font-size: 16px;">The payment date is the date on which the company actually distributes dividends to shareholders. On this date, the dividend is deposited directly into the investor's brokerage account.</span></div><div class="ace-line ace-line old-record-id-DTQ9d6HAyoMe1PxNKiWuyYGIsdf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Jpmwd041goVFxrxfMhduFgcXs1f"><span style="font-size: 16px;">The payment date is typically two to four weeks after the ex-dividend date, depending on the company's schedule and the broker's processing arrangements. Investors do not need to take any additional action as long as their account information is correct.</span></div><div class="ace-line ace-line old-record-id-BvtOdlxUioI4nAxGqbbuKOnzs6g"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Kdxyd1R1XoYquBxfsQGuolnhskb"><strong>3. Main Types of US Stock Dividends</strong></h2><div class="ace-line ace-line old-record-id-G4hSdfTIcokScbxs0m3unNuasCe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Xikmdnee2oysAQxjIVWu1TabsLe"><span style="font-size: 16px;"><strong>Cash dividends:</strong> The most common form of dividend payment. The company deposits cash directly into the shareholder's account, which shareholders may keep as cash or reinvest.</span></div><div class="ace-line ace-line old-record-id-FMRtdxhwbo8U46x6mROuibTXshd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-W4QUdt7EIoctRWxfUH8uAfsEsIg"><span style="font-size: 16px;"><strong>Stock dividends:</strong> Instead of paying cash, the company distributes additional shares. While the number of shares held increases, the value per share is adjusted accordingly. This type is relatively uncommon in the US stock market.</span></div><div class="ace-line ace-line old-record-id-FwPBdGjVco6UzAxO0ckupC3QsFc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ng9adTA9loOrZlxc180uoTUHsTh"><span style="font-size: 16px;"><strong>Special dividends:</strong> One-time dividend payments that are usually larger than regular dividends. They are often triggered by events such as asset sales, excess retained earnings, or changes in tax policy.</span></div><div class="ace-line ace-line old-record-id-OMVydGDsioQUjuxTQR1u1dt3sFe"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-VFqwdzOKFopRV4xDHLZuYpkQs3b"><strong>4. Dividend Payment Frequency</strong></h2><div class="ace-line ace-line old-record-id-Ya8ed4hWBokvH7x3RlouLPDNsAe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Oyvhddi8doKVhMxNochuJiAOs1e"><span style="font-size: 16px;">US companies follow different dividend schedules, allowing investors to choose stocks that fit their cash flow needs.</span></div><div><table class="ace-table" data-ace-table-col-widths="144;296;229" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="144"><col width="296"><col width="229"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Hp5qdiVUvoftASxGhMTuUsOws7c"><strong style="font-size: 16px;">Dividend Frequency</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-RVyZdaNR4oq4v7xtbtauIeMVsXd"><strong style="font-size: 16px;">Typical Examples</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-O9PRd4bksofQZUxb6ubumn5esBd"><strong style="font-size: 16px;">Key Characteristics</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-D7ucdQ5ldo4E6AxMegDuRY9WsYb"><span style="font-size: 16px;">Monthly</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-SCjZdJQpwonJyWxAyXeu5T2jsff"><span style="font-size: 16px;">REITs and some bond funds</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Mh3qdlEe7oyaEJxEsrJuD3M4sYf"><span style="font-size: 16px;">Most frequent cash flow</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-NiK3dHX64oHfnUx5GZAuCpHwsCb"><span style="font-size: 16px;">Quarterly</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-WyBZdly9ooSi5ixeAjhuNwbnsPd"><span style="font-size: 16px;">Most blue-chip stocks and large companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ISbUdt3Auo3RMBxFJgduQdy2sob"><span style="font-size: 16px;">Most common schedule in the US market</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-MGqVdpeZVoSwbkx7tqXu0dJgsZd"><span style="font-size: 16px;">Semi-Annual</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-YAVVd1usBoSyNDxAkWJulXzksYf"><span style="font-size: 16px;">Some multinational companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-C0LCdrdIropKXExGRB0uEmsjshc"><span style="font-size: 16px;">Relatively uncommon</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Rx3cdFGLWo1c8txhHJpuHXLdsXf"><span style="font-size: 16px;">Annual</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-A47Nd7mfeoU5j0xD79CuVL4xsVf"><span style="font-size: 16px;">A small number of companies and specialized funds</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-IinLd3LLNoJS1dxQdJruA82EsgW"><span style="font-size: 16px;">Larger single payment</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-GEiydBR5poznZCxUnH7unposs3c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RL6Cd9Sbeo43JqxAxvruB2NXsfe"><span style="font-size: 16px;">Investors seeking stable cash flow may prefer companies with quarterly or monthly dividends, while those focused on long-term capital appreciation may favor growth companies that reinvest profits into business expansion.</span></div><div class="ace-line ace-line old-record-id-VwUzdBlqQo4tVoxJiZVutnBvsBd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-FKnPdb3d8ob5nOxwWhFuhVQ8sKP"><strong>5. Tax Treatment of US Stock Dividends</strong></h2><div class="ace-line ace-line old-record-id-Ixu9dszY2o0Ciox0ZYtuKtcSsZf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NdLxdKFwlo8hk3xtCC7utbs6shd"><span style="font-size: 16px;">For non-US investors, the US government generally imposes withholding tax on dividend income. Investors are required to complete Form <a data-lark-is-custom="true" href="https://www.irs.gov/forms-pubs/about-form-w-8-ben">W-8BEN</a> to certify their foreign status. Tax treaties between the United States and different countries may provide reduced withholding rates. Taxes are typically deducted automatically when the dividend is paid, and investors receive the net amount after withholding.</span></div><div class="ace-line ace-line old-record-id-HAXnd9sPzo57KAxiqBHuYRa9std"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-FQtIdLL8Ko1N0ax3y16uqQraskh"><strong>6. Dividend Reinvestment Plans</strong></h2><div class="ace-line ace-line old-record-id-E6zndtlbToAXz4x1qE5uDTgfswf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LmFEdld4to4fF5x16BnuKmsUsOe"><span style="font-size: 16px;">A dividend reinvestment plan (DRIP) allows investors to automatically use cash dividends to purchase additional shares of the same company.</span></div><div class="ace-line ace-line old-record-id-XobsdKiAlom9Dsx2p97uK5Kss8d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DP81dsysKoBkuwxHpgMufjsksfb"><span style="font-size: 16px;"><strong>Compounding effect:</strong> Reinvested dividends increase the number of shares held, which can generate larger future dividend payments over time.</span></div><div class="ace-line ace-line old-record-id-U9efdS0UKonEFoxq94tufS0Wskc"><span style="font-size: 16px;"><strong>Lower transaction costs:</strong> Many brokers offer dividend reinvestment without additional fees, and some may provide discounted share purchases.</span></div><div class="ace-line ace-line old-record-id-GtS9dEY8Co9MT3xwXAQuJZDEsRe"><span style="font-size: 16px;"><strong>Simplified operations:</strong> Once the feature is enabled, the system automatically reinvests dividends without requiring manual action.</span></div><div class="ace-line ace-line old-record-id-Jzd8dtDyNoxJZdxzw57uCg56sDc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AEUjd6ypdoN3SqxSvgVulCBjstl"><span style="font-size: 16px;">Investors can choose to receive cash dividends or enroll in a dividend reinvestment plan. For long-term investors, reinvesting dividends can be an effective strategy for building wealth through compounding.</span></div><div class="ace-line ace-line old-record-id-YpL5dkubVoOw0AxDiUBugDFxsGg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-I3qCdfe0io8oVUxCXA2uQD8esjf"><strong>7. FAQ</strong></h2><div class="ace-line ace-line old-record-id-Zhx8d4noVo7e6VxxalBu29cisng"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SvjndohfvoY49VxN65guooEQsff"><span style="font-size: 16px;">7.1 How often are US stock dividends paid?</span></h3><div class="ace-line ace-line old-record-id-WGzadeOLtoXnVKx4sDyuDmF3sRr"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-M4NOdpeUnowt6XxbARcuh0ZRsRg"><span style="font-size: 16px;">Dividend frequency varies by company. Most US companies pay dividends quarterly, while some REITs and bond funds pay monthly. A smaller number of companies use semi-annual or annual dividend schedules.</span></div><div class="ace-line ace-line old-record-id-LIiQdX7KIoyeygx329vu4fU8srW"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FtPSdZMUPoIQpqxAJeVuKTERs6b"><span style="font-size: 16px;">7.2 When will I receive the dividend?</span></h3><div class="ace-line ace-line old-record-id-XzTbd0rDRotTDlxYeqVuNQaas6f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SIN2dH7NioUqi0x7AYiufwc1sss"><span style="font-size: 16px;">Dividends are usually credited on the payment date or within a few business days afterward. The period between the ex-dividend date and payment date is typically two to four weeks.</span></div><div class="ace-line ace-line old-record-id-PMXYdgXw1o6cWzxW47rumyfMsme"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HmdTdS9Ynozenqx83ePuKEWIsSg"><span style="font-size: 16px;">7.3 Can I receive the dividend if I buy the stock on the ex-dividend date?</span></h3><div class="ace-line ace-line old-record-id-ViEWdXjYxoVNhOxI6GduMkgWsDe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CeBQdeeCLoYiTKx3Ys5uI67csvd"><span style="font-size: 16px;">No. You must own the stock before the ex-dividend date to qualify for the dividend. Shares purchased on or after the ex-dividend date are eligible only for the next dividend cycle.</span></div><div class="ace-line ace-line old-record-id-B4kSddhNBosro9xyyDPuuJEosHf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HRMldLqRTouThixEPAOuU5Nzsaf"><span style="font-size: 16px;">7.4 Do dividends affect stock prices?</span></h3><div class="ace-line ace-line old-record-id-WfrndzdqOoHhSDxlnvVuBYHSsmg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-R003dKJsooXglMx9HI2uU0Hns7d"><span style="font-size: 16px;">Yes. At the market open on the ex-dividend date, the stock price is typically adjusted downward by approximately the dividend amount per share.</span></div><div class="ace-line ace-line old-record-id-YkRydzRC1owU7KxdQlBuY5WrsJe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UO5Kd54UjoLH4nxwDb5udbTIsOh"><span style="font-size: 16px;">7.5 How should I choose dividend stocks?</span></h3><div class="ace-line ace-line old-record-id-Q9MXdt50Poak4LxtAGguUUR3s3g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-A4YZdufI4oph2rxyC29uJGndsNd"><span style="font-size: 16px;">Investors should consider dividend yield, payout ratio, dividend history, industry stability, and overall financial health. Rather than focusing only on high yields, it is generally preferable to select companies with sustainable payout ratios and a stable track record of dividend growth.</span></div><div class="ace-line ace-line old-record-id-UzbqdeZ3SoeHZixIPwrunv5qsVe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UciUdWRxroiEZUxR6jDukpW6sGe"><span style="font-size: 16px;">7.6 Are US stock dividends guaranteed?</span></h3><div class="ace-line ace-line old-record-id-YsSZd3ax5o5xeixrSviuNpKQsOb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ByYVdHYzuopqpSxRFYhu0R0Gske"><span style="font-size: 16px;">No. A company's board of directors may adjust, reduce, or suspend dividend payments at any time based on business conditions. Investors should continue to monitor the financial performance of the companies they own.</span></div><div class="ace-line ace-line old-record-id-GH80di9WDoVvJOx2Tcbut2VosGb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-FfODdrcMnoX3iMxKFyruMud9sqh"><strong>8. Conclusion</strong></h2><div class="ace-line ace-line old-record-id-F3hFdfyY9oUPJrxsut6ujkHxsUg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D6PQd9Q6Ko4mKqxZZPtuGskHs9o"><span style="font-size: 16px;">Understanding the US dividend process is essential for investors. From the declaration date to the payment date, each stage has its own rules and timing. By understanding dividend mechanics, tax treatment, and key dates, investors can better plan their investment strategies, capture dividend opportunities, and manage risk effectively.</span></div><div class="ace-line ace-line old-record-id-UMurdy9tpoTaRLxdvmeuopmwsVe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WGTddlkURoI7XcxiYB1uMBqZs8f"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-NZMPdnY7WobqDQxb77suypf7sEb" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-L3PwdE0cgoPbdLx2lTCuGNrbsBA" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-FYl7dmvxbo05f8xCRrUuHMEQspe" data-list="bullet"><div><span style="font-size: 16px;"><a href="https://www.mexc.com/support/article/the-complete-guide-to-us-stock-risk-management-375844685334322176">The Complete Guide to US Stock Risk Management: Navigating Investment Pitfalls</a></span></div></li><li class="ace-line ace-line old-record-id-XCamdcK8uoRwMQxi7nBu1cbPsvg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/free-us-stock-analysis-tools-373856828440805376" data-lark-is-custom="true" style="font-size: 16px;">Free US Stock Analysis Tools: A Complete Guide to Essential Websites for Beginners</a></div></li><li class="ace-line ace-line old-record-id-SSiNdUSkhoIjOex5f3NuAH4Tsie" data-list="bullet"><div><a href="https://www.mexc.com/support/article/what-events-and-dates-to-note-when-buying-us-stocks-a-complete-guide-to-shareholders-meetings-dividends-and-ex-dividend-dates-370876112547430400" data-lark-is-custom="true" style="font-size: 16px;">What Events and Dates to Note When Buying US Stocks? A Complete Guide to Shareholders' Meetings, Dividends and Ex-Dividend Dates </a></div></li></ul><div class="ace-line ace-line old-record-id-XYTddaUhmopaG6xElrDuVTWesLe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TmRadfDUBoaQkrxBn2TuFVO2sYd"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-DxH1dUY9XopbO5x7fVmu0GZbsgb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-T8x1dVrDOoH8krxo5Oou3hgPsLc"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-REUadloGboeYwrxZS9JuBpYQsDf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FmgkdLPUboa73gxek03uG6gysP6"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
Corporate Actions Explained: Stock Splits, Reverse Splits, Rights Issues, and Shareholder Meetings
<div data-page-id="TEXWdD6ymoXCMdxa4uPupZQSs1c" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-YtINdraInojdHoxrIJZuezh7srd"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-KcaVdyIjOoJuPJxrjRVudSJtslb" data-list="bullet"><div><span style="font-size: 16px;">Corporate actions are events initiated by listed companies that affect the company or shareholder's rights.</span></div></li><li class="ace-line ace-line old-record-id-Z7j2duH8Mo33oBxdp7juJSeRsNe" data-list="bullet"><div><span style="font-size: 16px;">Stock splits and reverse splits adjust share prices and the number of shares outstanding without changing shareholder's total ownership value.</span></div></li><li class="ace-line ace-line old-record-id-RKqldl9XmovHKpxNVU8upuAUsof" data-list="bullet"><div><span style="font-size: 16px;">Rights issues and private placements are common fundraising methods, but they differ in eligibility and transferability.</span></div></li><li class="ace-line ace-line old-record-id-Qc68djihWoCwEUxU9QVub2xUsZf" data-list="bullet"><div><span style="font-size: 16px;">Bonus shares are a form of stock dividend in which companies distribute additional shares to shareholders.</span></div></li><li class="ace-line ace-line old-record-id-FLxsdkJ5nopUtMxc45wuXSHRsgd" data-list="bullet"><div><span style="font-size: 16px;">Shareholder meetings are the highest decision-making body of a company and are responsible for approving major corporate matters.</span></div></li></ul><div class="ace-line ace-line old-record-id-YeuhdzBx0oucMBxQQqUuUFwcsCb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-M08mdRpgtoRqRsxp5Axu69I6skb"><strong>1. What Are Corporate Actions?</strong></h2><div class="ace-line ace-line old-record-id-NvsmdkMZOoXgQlxHt8buztPNssh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-X1dmdn486o4czHxo9Quub0U2shb"><span style="font-size: 16px;">1.1 Definition of corporate actions</span></h3><div class="ace-line ace-line old-record-id-UGvodEWf9ojzihxq3RRuyHTmsve"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CBladU1vUo8MKGxvygWuvAifs7d"><span style="font-size: 16px;">Corporate actions refer to events initiated by listed companies that affect the company or its shareholders. These actions include dividend distributions, stock splits, and rights issues that directly affect shareholder interests, as well as changes such as company names, ticker symbols, or registered addresses that generally have a smaller impact on shareholders.</span></div><div class="ace-line ace-line old-record-id-Fd2Qd9EYcomnRBxc30Wu3Jmwsyg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NFNUdKrWtokWllxUd6tueKuwsBf"><span style="font-size: 16px;">For investors following global financial markets through MEXC, it is important to pay attention to the key dates associated with corporate actions that may affect shareholder's rights.</span></div><div class="ace-line ace-line old-record-id-J7zrdV1Oaokcztx5DHjuvuhxsPd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UijbdoqrBonY9UxkVtruwcsisPf"><span style="font-size: 16px;">1.2 Key corporate action dates</span></h3><div class="ace-line ace-line old-record-id-AcyfdApWFo1cJ9xyGtRul0Ids3f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TU4MdMq57om1jpxy0cTuBHQYsDb"><span style="font-size: 16px;">Corporate actions in the US stock market generally follow a standard timeline:</span></div><div class="ace-line ace-line old-record-id-Qi6KdTdGZoYDqTxi0nnuu6BFszh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OBupdALQUoghpDxrKIMuj94Gs8g"><span style="font-size: 16px;"><strong>Announcement Date:</strong> The date on which a company officially announces a corporate action. Details of the action and its timeline are disclosed so investors can determine whether they wish to hold the stock and participate.</span></div><div class="ace-line ace-line old-record-id-GjqldgLZ0oWYdCxzzqbu4LTxsOd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LRFmdv8KToMkW3x1pjIuPW7qsdg"><span style="font-size: 16px;"><strong>Ex-Date:</strong> The key date used to determine eligibility. Investors who hold the stock at the close of trading on the business day before the ex-date are generally entitled to participate in the corporate action. For cash dividends, the dividend amount is typically reflected in the stock price adjustment when trading begins on the ex-date.</span></div><div class="ace-line ace-line old-record-id-Ikv2dUMNKo58EHxto5fuHDocsEh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-S4nvd2yVroPjPax8Yisu7uJds2b"><span style="font-size: 16px;"><strong>Record Date:</strong> Commonly used for dividends and bonus share distributions, the record date is typically set after the ex-date. On this date, the company reviews its shareholder register to determine who is eligible to receive the distribution.</span></div><div class="ace-line ace-line old-record-id-Mbged6NtfoA6JcxEjfrujLY3soc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FoEXdKeUVoW80RxIW9Xu5cOBsRh"><span style="font-size: 16px;"><strong>Payment Date:</strong> The date on which shareholders actually receive the dividend payment or additional shares. The relevant entitlement is credited to the investor's account on this date.</span></div><div class="ace-line ace-line old-record-id-UQlyd7gnNotOwYxej17un1Y4sob"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J6PSdk7mco8JZ1xvPq1uMiSVsZg"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-HDJud4Oezo8UiGxS1VxuzF5Rs6g"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-QGNydxLsKo2XgzxYLLhuhuNCsEb"><strong>2. What Are Stock Splits and Reverse Splits?</strong></h2><div class="ace-line ace-line old-record-id-EDKqdGFcdoLhxBx4i1Xu1BflsUg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ElT9dmYhaoeZ4uxQavJuJNNssag"><span style="font-size: 16px;">2.1 What is a stock split?</span></h3><div class="ace-line ace-line old-record-id-LjEkdwZEmoMt63xSpNUuNgxdsBb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-B8Dhdm9QloY7vyxsXnVu9Rd6s0r"><span style="font-size: 16px;">A stock split occurs when a company divides existing shares into a larger number of shares. Companies typically conduct stock splits when the share price has risen significantly, with the goal of improving affordability and liquidity.</span></div><div class="ace-line ace-line old-record-id-VsQrdSz58oj0VDxFD7Rut6vHsN3"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RSQmdh7EWoAtUUxBaiQuWFKBsGc"><span style="font-size: 16px;">For example, in a 2-for-1 stock split, a stock trading at $200 per share with 200,000 shares outstanding would become a stock trading at approximately $100 per share with 400,000 shares outstanding.</span></div><div class="ace-line ace-line old-record-id-I038dxYAmo6b3nxqmCYulpbhsf4"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-LdAedTwWAosdOUxnozquGdfks9c"><span style="font-size: 16px;">A stock split does not change shareholder ownership value or the company's total market capitalization. The number of shares held increases proportionally, while the value of each share decreases accordingly.</span></div><div class="ace-line ace-line old-record-id-M2NKdu6VJoAOSZxb9Frumf1xsSh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-VfqQd6mTqox8i0x8ouvuyOGgsdg"><span style="font-size: 16px;">2.2 What is a reverse split?</span></h3><div class="ace-line ace-line old-record-id-Z6Kcd545woiL5Gxzni8ueov0sYb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Qr8wdWke8oRXLkxvbGXuxZjtsFe"><span style="font-size: 16px;">A reverse split, also known as a reverse stock split, combines multiple shares into a smaller number of shares. Companies typically use reverse splits when the share price has fallen too low and they wish to meet exchange listing requirements or improve market perception.</span></div><div class="ace-line ace-line old-record-id-QSGqdkHuWoXLULxXIGxuSjBcsbb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CfzMdcYhwol29GxOzTLuk28eswc"><span style="font-size: 16px;">For example, in a 1-for-4 reverse split, a stock trading at $10 per share with 100,000 shares outstanding would become a stock trading at approximately $40 per share with 25,000 shares outstanding.</span></div><div class="ace-line ace-line old-record-id-CcC5dfHryouVK5xpAyAu38NXstd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J0UEdDjMDoMvuuxKFrnulw40svf"><span style="font-size: 16px;">Like a stock split, a reverse split does not change shareholder ownership value or the company's total market capitalization. Only the share price and the number of shares outstanding are adjusted. MEXC reminds investors to pay attention to changes in their holdings when a company announces a reverse split.</span></div><div class="ace-line ace-line old-record-id-MIjad5mlCoLxLYxPMmfufedgsdg"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-VhmrdzyJuogVBZxwj1Fu41uDs8d"><strong>3. What Are Rights Issues and Private Placements?</strong></h2><div class="ace-line ace-line old-record-id-A387dsstcoCoq8xMil1uTa6qsHb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-VqfIdPmxBoJVm0xSYv7usaSesJg"><span style="font-size: 16px;">3.1 What is a rights issue?</span></h3><div class="ace-line ace-line old-record-id-LPgSdu1APofaLAx6Zj3uGRQPs7g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-K5vhdWytqoQUNJxwN0FunVIKsAe"><span style="font-size: 16px;">A rights issue is a fundraising method in which a company offers new shares to existing shareholders. Eligible shareholders receive rights that allow them to subscribe for additional shares based on their current ownership.</span></div><div class="ace-line ace-line old-record-id-IL8idXTS9oie9nxmnPGuqVJIsqd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DDPgdkTwgo7sijxvwH3uSYuks4e"><span style="font-size: 16px;">Rights are typically offered at a discount to the market price to encourage participation. In the US stock market, rights can generally be transferred or sold, allowing shareholders who do not wish to subscribe to monetize the rights instead.</span></div><div class="ace-line ace-line old-record-id-JBZ6dfPtaoeJ89xgbk3uhTIOsdh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BOaTdFXjroQypzxzbAlug6a1szd"><span style="font-size: 16px;">3.2 What is a private placement?</span></h3><div class="ace-line ace-line old-record-id-O3Y1ddIRPowsqixikBLuaAPEsAM"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Rzv4ddIvooo3FdxrFa8uzGLTsRd"><span style="font-size: 16px;">A private placement is a fundraising method in which a company issues shares to selected individuals or institutional investors. The shares are often offered at a discount to the market price to attract participation from those investors.</span></div><div class="ace-line ace-line old-record-id-OY0lddclioOVr4xoqkHuEsLdsNh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-QoqqdnRNaoYoqRxjzU1u85BUsm5"><span style="font-size: 16px;">3.3 Key differences between rights issues and private placements</span></h3><div class="ace-line ace-line old-record-id-W2xBdcz5po0POcx02BNuFrqLsBb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PePcdOiSioeThkxh3tJub0oXseg"><span style="font-size: 16px;">A rights issue is offered to all existing shareholders, who can choose whether to participate. Shareholders who do not exercise their rights may experience dilution of their ownership.</span></div><div class="ace-line ace-line old-record-id-Rfr0dGsOKowR6dxdVw5uvJRgsMg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-C2MBdjUQhoDVCXxeL39uacBUsyb"><span style="font-size: 16px;">A private placement is offered only to selected investors. Existing shareholders who are not included in the placement may experience dilution without having the opportunity to participate.</span></div><div class="ace-line ace-line old-record-id-MVnud6CpMoCtb3x4ureuhltnsyS"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Ti6Gdsxvoo3doXxgcmLuJFDwsBj"><strong>4. What Are Bonus Shares?</strong></h2><div class="ace-line ace-line old-record-id-WTpSdMrgQo15JKxySbnu3sRqscb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-XkUEdcyAXocPZwxQkKIuklqJsAg"><span style="font-size: 16px;">4.1 Definition of bonus shares</span></h3><div class="ace-line ace-line old-record-id-EheGdffQGo1shRxydWquZx3QsQe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HczsdRClUoQBs2xH3d4uDN6psEf"><span style="font-size: 16px;">Bonus shares are additional shares distributed to shareholders based on their existing ownership or according to the company's articles of association. Instead of distributing profits as cash dividends, the company converts part of its profits into share capital and issues additional shares to shareholders.</span></div><div class="ace-line ace-line old-record-id-KsUtdJtQboAkcLxxwrquP0n9sjZ"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Kyn2dVlPsoEOF2xDzApuhnNZsDd"><span style="font-size: 16px;">For a more detailed explanation, see <strong><a data-lark-is-custom="true" href="https://www.mexc.com/support/article/stock-dividends-explained-375847313854307328">US Stock Bonus Shares Explained: Understanding Stock Dividend Distribution in the US Market </a></strong>.</span></div><div class="ace-line ace-line old-record-id-ScbAdnVSZo8wCoxIvX3uPF5tscg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-AgXGdc0NIoBfI3xb3cguKu4rsIc"><span style="font-size: 16px;">4.2 How bonus shares work</span></h3><div class="ace-line ace-line old-record-id-SraXduStaoNPkIxGDY9uOZOCshe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WPaRdboSsoqjhyxSimYucEBJsCb"><span style="font-size: 16px;">Like many corporate actions, bonus share distributions generally involve four key dates. On the announcement date, the company discloses the bonus ratio and distribution details. On the ex-date, the value of the bonus shares is reflected in the stock price adjustment.</span></div><div class="ace-line ace-line old-record-id-CXYxdIpLGo9IxvxtosEuv38VsHd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ACaydJcGTo0MOKxfhLbu4ooSsHV"><span style="font-size: 16px;">For example, assume a stock trades at $10 per share and an investor owns 1,000 shares. If the company announces a 1-for-1 bonus issue, the investor will hold 2,000 shares after the ex-date, while the share price adjusts to approximately $5 per share. The investor's total holding value remains $10,000.</span></div><div class="ace-line ace-line old-record-id-HTwsdxr6CoHIPZx2YFXuwGgTsEe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-N2HZdeesGoCBf9xypQCutAQdskh"><span style="font-size: 16px;">On the record date, the company determines which shareholders are eligible to receive the bonus shares. The additional shares are then credited to eligible investors on the payment date.</span></div><div class="ace-line ace-line old-record-id-Jb65dfhVDoZzVqx11Gvu4NVds3f"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ZbEzdEYZDotFd6xFG8IuQpdesJc"><strong>5. What Are Shareholder Meetings?</strong></h2><div class="ace-line ace-line old-record-id-BoCNd1mMEoUUN0xnFF9uMM4psHg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-AIMKdrGuPovKJ5xeiLbu9QEus8d"><span style="font-size: 16px;">5.1 Definition and role of shareholder meetings</span></h3><div class="ace-line ace-line old-record-id-OeGVdwbxMoDFGZxlFtRua8CTsVh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Z10CdwPlqoHwEIxJj5quHq0psXb"><span style="font-size: 16px;">A shareholder meeting is the highest decision-making body of a company. It consists of all shareholders and is responsible for approving major corporate matters.</span></div><div class="ace-line ace-line old-record-id-TeXldWExzoEJdcxQWV5uOzwHsLd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GE2TdmEesoQVTTxFYAiunlEqs7c"><span style="font-size: 16px;">Shareholders have the authority to elect and remove directors and vote on important issues affecting the company's operations and governance. Major corporate decisions and key appointments generally require shareholder approval before taking effect.</span></div><div class="ace-line ace-line old-record-id-PN31dPNyEohOIHxvPT5uCUMQsJg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Hve1dihfIoxzbjx0ZMeuzPr9scf"><span style="font-size: 16px;">5.2 Types of shareholder meetings</span></h3><div class="ace-line ace-line old-record-id-WX8kdi0lnolZxKxJWb9uL1cRskW"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Q04rdTFDwoxv5ixSxAwuv2ausHe"><span style="font-size: 16px;"><strong>Statutory Meeting:</strong> Applicable to certain companies following their establishment. The purpose is typically to review statutory reports and provide shareholders with an overview of the company's operations and business foundations.</span></div><div class="ace-line ace-line old-record-id-U6A0d5mvwoA5wPxjHFLusHCvsmg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DDyvdjxQno1ej4xnKEVuod7asDg"><span style="font-size: 16px;"><strong>Annual General Meeting (AGM):</strong> The regular shareholder meeting held once per year. Common agenda items include electing directors, amending corporate bylaws, approving dividend proposals, reviewing management reports, and discussing changes to company capital.</span></div><div class="ace-line ace-line old-record-id-NsX6dKD38odW2Txqhdau0wlksxh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-H5gRdBr22o5mSdxmRK5uDpQYs7g"><span style="font-size: 16px;"><strong>Extraordinary General Meeting (EGM):</strong> Convened to address urgent or special matters that cannot wait until the next AGM. These meetings are typically called when significant developments affect the company or shareholder interests.</span></div><div class="ace-line ace-line old-record-id-QaK1dGLNloe0Dfxz5yPuA87nsPb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ti0Sdiq15obQu2xRE7YuN6hKs0d"><span style="font-size: 16px;">MEXC reminds investors that shareholder meeting schedules vary by company and that investors should refer to official company announcements for the most up-to-date information.</span></div><div class="ace-line ace-line old-record-id-Jf73d64LpoIINCxKRAfuj9Jbsxh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-H0JUdZfonoB2FYxpv5Zu2rVfsRb"><strong>6. How Corporate Actions Affect Your Holdings</strong></h2><div class="ace-line ace-line old-record-id-FTxGd3ktKoxZK6xaRHMugkogsOD"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TpKadgiNBoK15txwsfYuQHx8sVe"><span style="font-size: 16px;">When a company conducts a stock split, reverse split, bonus issue, or similar corporate action, the number of shares held in an investor's account is adjusted automatically according to the announced ratio. While the number of shares changes, the investor's overall ownership value generally remains unchanged.</span></div><div class="ace-line ace-line old-record-id-M4szd31T7oWpEdxPV3KuztIRsyg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Jrb4dxBIxocZBpxeMXduzQ5OsRe"><span style="font-size: 16px;">Investors should also note that their cost basis per share is adjusted accordingly. After a stock split, the cost basis per share decreases proportionally. After a reverse split, the cost basis per share increases proportionally.</span></div><div class="ace-line ace-line old-record-id-K8iidlZTIoDulexee21uqEuEs6e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CTpndRsYAo07JMxpixBuS9LVs3d"><span style="font-size: 16px;">For cash distributions such as dividends, the payment is credited to the investor's account on the payment date and becomes a cash asset.</span></div><div class="ace-line ace-line old-record-id-FkaLdUsegojqTUx3JBVuCup2ssb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-CUUudAKszoBaCyxJRxmuAAoKsWf"><strong>7. Corporate Actions FAQ</strong></h2><div class="ace-line ace-line old-record-id-UCp0d1A0wo6pQMxbvipuyGuasMe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SRN1d0u64ozusixx4wCubLWUsXf"><span style="font-size: 16px;">7.1 Will stock splits and reverse splits affect my total investment value?</span></h3><div class="ace-line ace-line old-record-id-BUnudjALzoVJnUxeI6PuCcGSsVf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QxPvdfR0HozFDgxzDfXuGftpsgd"><span style="font-size: 16px;">No. Stock splits and reverse splits only adjust the share price and the number of shares outstanding. Total shareholder ownership value and market capitalization remain unchanged.</span></div><div class="ace-line ace-line old-record-id-DFZGd6lduoKa07xKG3Tupl9ZsRe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HRTOdEenRoLp2exRUGFuLLRvsY7"><span style="font-size: 16px;">7.2 How do I know whether I am eligible for a corporate action?</span></h3><div class="ace-line ace-line old-record-id-XRpKdS7pEovRHNxHilmuNm46ssb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BTsZdacEAoVKIexpFjzu0lwOsvb"><span style="font-size: 16px;">The key date is the ex-date. Investors who hold the stock at the close of trading on the business day before the ex-date are generally eligible to participate.</span></div><div class="ace-line ace-line old-record-id-G6SudlvKMoPCyrxUqoQufmbisJe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JUltdaW7Iod6hwxr2LtutP2nsgg"><span style="font-size: 16px;">7.3 What can I do if I do not want to exercise my rights?</span></h3><div class="ace-line ace-line old-record-id-PSTldXpDkooIIHxZLdpuhCkFsBQ"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-X7C6di9l9oYz8RxsVyZuCrRtspe"><span style="font-size: 16px;">Rights can generally be sold or transferred in the market. Shareholders who do not wish to subscribe for new shares may choose to sell their rights or allow them to expire.</span></div><div class="ace-line ace-line old-record-id-XsuEdGejBoYZDdxfdnYuoZcgsjf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-GJ1GddudQotefsxPKQCuu6bsspb"><span style="font-size: 16px;">7.4 What is the difference between bonus shares and cash dividends?</span></h3><div class="ace-line ace-line old-record-id-StjpdQ9rDoDgTzxoTNtuz9ZWsOd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NRY7dsEEqoDlRuxBZR5uJ5lgsZN"><span style="font-size: 16px;">Bonus shares distribute profits in the form of additional shares, while cash dividends distribute profits directly as cash.</span></div><div class="ace-line ace-line old-record-id-Af8fdfDEXo38zEx4EOxuiBNIsIe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-N9kRdWGDbograQxYQUCuVN86ssh"><span style="font-size: 16px;">7.5 How do shareholder meeting decisions affect investors?</span></h3><div class="ace-line ace-line old-record-id-KYLtdvBVEo5PlUxJU7DuaTP7sAb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RkRXdVI7doqj0YxAXOguow1JsAf"><span style="font-size: 16px;">Shareholder meeting resolutions can affect dividend policies, major investments, management changes, and other important matters that influence shareholder interests and company strategy.</span></div><div class="ace-line ace-line old-record-id-SAIgdjH3tokAXExxZhJugmG7sHh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-NRBVdTdUaoJrVTx3fGOujknWsUf"><span style="font-size: 16px;">7.6 How are the key corporate action dates related?</span></h3><div class="ace-line ace-line old-record-id-WJBIdphQBoPpI7xg4BZuMw47sad"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XtuldNyPGoQi74xJk6Aub8qbs0g"><span style="font-size: 16px;">The typical sequence is announcement date, ex-date, record date, and payment date. The announcement date comes first, the payment date comes last, the ex-date determines eligibility, and the record date confirms the final list of eligible shareholders.</span></div><div class="ace-line ace-line old-record-id-HtPedn2ftoLAhUxuex5utBezs6g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ROhgdFQEgo8RHpxRaFzulmbosOg"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-C5L5dsPaKoOvvvx5NtBuP3X8sub" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/what-is-stocks-/1" style="font-size: 16px;">What Is Stocks?</a></div></li><li class="ace-line ace-line old-record-id-Db52dTrWKoRP8yxDulpuGV2osP3" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ</a></div></li><li class="ace-line ace-line old-record-id-YXeidAOVJoZpaAx8XANuR5avsYg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stock-dividends-explained-375847313854307328" data-lark-is-custom="true" style="font-size: 16px;">US Stock Bonus Shares Explained: Understanding Stock Dividend Distribution in the US Market </a></div></li><li class="ace-line ace-line old-record-id-OviGdhxF4osHB8xDx2AuwgyLsDb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/how-are-stock-investment-gains-taxed-a-practical-guide-to-us-stock-tax-calculation-378076298801724416" data-lark-is-custom="true" style="font-size: 16px;">How Are Stock Investment Gains Taxed? A Practical Guide to U.S. Stock Tax Calculation </a></div></li><li class="ace-line ace-line old-record-id-UXD1d2SC5oM06Yx1PTvuxD7HsXg" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-bonus-shares-explained-378075302369310720" data-lark-is-custom="true" style="font-size: 16px;">How to Open a US Stock Trading Account: A Beginner's Guide </a></div></li></ul><div class="ace-line ace-line old-record-id-Ik1wdVuGMooU09x6mjKuvws6sMg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NjBydM0KWoOwzMxGY9CuV2i2sth"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-Tf8EdmZteo45BgxMa4gu4B0Isje"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ACYIdkjrZow99cx9HQxucqCtsig"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-UW1Mdmy5toSrq9x4bTQufakdsNY"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-B4xrdDzbyo2UlXxOM87uJayhsne"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
How Are Stock Investment Gains Taxed? A Practical Guide to US Stock Tax Calculation
<div data-page-id="VbrMdZST4oNlicxpIU1u5RSNs9b" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-S94fdzvJjo6Ix5xJfWlud2B9stb"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Kqhbd9M00oiV44xREHeuUX3jswb" data-list="bullet"><div><span style="font-size: 16px;">US stock investment gains are subject to capital gains tax, with rates determined by holding period and income level.</span></div></li><li class="ace-line ace-line old-record-id-U2Y9dvRaioQAxXxlQRNuqJvxsbc" data-list="bullet"><div><span style="font-size: 16px;">Accurate calculation of cost basis directly affects taxable gains and final tax liability.</span></div></li><li class="ace-line ace-line old-record-id-MIXqdiuPXoTE32xvWRLuD6QTsJg" data-list="bullet"><div><span style="font-size: 16px;">Dividend income is also taxable, divided into qualified and non-qualified dividends.</span></div></li><li class="ace-line ace-line old-record-id-Y714dyrwwov23IxbaoHuHqE3sih" data-list="bullet"><div><span style="font-size: 16px;">Using tax strategies effectively can reduce investment tax burden and improve actual returns.</span></div></li></ul><div class="ace-line ace-line old-record-id-Pu4DdfqxAo5QeMxvG98u0SRdsIc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-WRlodgX1lomjarxAVtsu86UOsQc"><strong>1. What Is US Stock Capital Gains Tax</strong></h2><div class="ace-line ace-line old-record-id-JqVAdU2vZoBWYnxU4NauIQERsQc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D08cdRxOLoTWsSx2c7iuXTmysyg"><span style="font-size: 16px;">Capital gains tax is the tax investors pay when they sell stocks or other capital assets for a profit. When you sell shares at a price higher than your purchase price, the difference constitutes a capital gain that must be reported and taxed.</span></div><div class="ace-line ace-line old-record-id-GuzAdq0cKoQCa3xf9K5uwSONsNb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-X6pLdokBWoeH71xdkavuC9K5sZf"><span style="font-size: 16px;">Under the US tax system, capital gains fall into two categories: short-term and long-term. These two types carry significantly different tax rates that directly affect investors' actual returns. For users investing through compliant brokers partnered with MEXC, understanding these tax rules helps with better investment planning.</span></div><div class="ace-line ace-line old-record-id-Xdt9dMUpro4r16x5SkCuuAewsxh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YkzidexGhoOncNxesvjuuV6ssZc"><span style="font-size: 16px;">Capital gain formula: Capital Gain = Sale Price − (Purchase Cost + Transaction Fees)</span></div><div class="ace-line ace-line old-record-id-ZZKld8XKvo9X26xNSRwuCSUEsrc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ALaHdBdRjoR7jjxZDvguEWDWsNe"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-N0j9dPvs7o7pdxx2BB3uVl55sqh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ERCldoruFoHlCixyT08u9o1XsJf"><strong>2. Short-Term vs. Long-Term Capital Gains Tax Rates</strong></h2><div class="ace-line ace-line old-record-id-Z9eydBXXkoatH5x8t4WuSr86sFd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ON7tdU3jHonXMVxfI44uMBdusJd"><span style="font-size: 16px;">2.1 Short-Term Capital Gains Tax Rates</span></h3><div class="ace-line ace-line old-record-id-V17ZdFq2KoiiUSx9tLouk37msDf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Y9QIdOFVDojebnxqbBxup8ANsxh"><span style="font-size: 16px;">Investment gains on assets held for one year or less are classified as short-term capital gains. These are taxed at ordinary income rates, ranging from 10% to 37% depending on the investor's total taxable income and filing status.</span></div><div class="ace-line ace-line old-record-id-H5QcdB9VQoeo6ZxBHiMuhs8SsRc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UNbAdGmFtoT4u1xZ6mcuO8qisbe"><span style="font-size: 16px;">2025 Tax Year Short-Term Capital Gains Rates (Single Filers):</span></div><div><table class="ace-table" data-ace-table-col-widths="346;100" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="346"><col width="100"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Q3pHdAbHRodub4xBa7XuQ75hsLe"><strong style="font-size: 16px;">Taxable Income</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-IUZLdTyrjoaq9AxzgbguIQgrshf"><strong style="font-size: 16px;">Rate</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-NQrndOhqfoqdBGx7lSPu6A3Wsnf"><span style="font-size: 16px;">$0 – $11,925</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-G6axdrtPGoqpHHxis8Huae41s54"><span style="font-size: 16px;">10%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-QGHddVks5omiluxXHOKu0661sAh"><span style="font-size: 16px;">$11,926 – $48,475</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-YCFpdjN4yoVThIxOcKhuGQyWsSb"><span style="font-size: 16px;">12%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Znqjd9vTjoU0LtxgrS2u7IWksgd"><span style="font-size: 16px;">$48,476 – $103,350</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Z6e5d2EOuopBQtxmv5quDh5CsMf"><span style="font-size: 16px;">22%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-E0TjdxXPyoQ2Trx7iFpuaF8hsKg"><span style="font-size: 16px;">$103,351 – $197,300</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-XOEhdPr5Tor5Rhxj7MZuMQ0NsSc"><span style="font-size: 16px;">24%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Ye5VdNeTIoK1oMxmW6Uu91TdsVf"><span style="font-size: 16px;">$197,301 – $250,525</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-GAFKdiVHworo8dxbBzyuAjUKsdd"><span style="font-size: 16px;">32%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-CFfpdQD6GouKqXxabOUuxu3JsCd"><span style="font-size: 16px;">$250,526 – $626,350</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-QVhidYgYXoiUZHxGU1PuCK64sFt"><span style="font-size: 16px;">35%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-KwH9dSXYDozqBhxD2aBu5vltsqc"><span style="font-size: 16px;">Over $626,350</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-JEMSdYj4JoxTJqxfUInuZGeTsxc"><span style="font-size: 16px;">37%</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-GwjsdoIgxoJHbqxY10SueoDxskc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Vwm4ddARZoKPvix1wv1uyqhDsHb"><span style="font-size: 16px;">2.2 Long-Term Capital Gains Tax Rates</span></h3><div class="ace-line ace-line old-record-id-P3NedbQNOoMfnFxoNNzuefBNsgb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Jtfsd704joVVMnxtd8Lus3YNsoe"><span style="font-size: 16px;">Gains on assets held for more than one year qualify for preferential long-term capital gains rates, which is a key mechanism in the US tax law designed to encourage long-term investing.</span></div><div class="ace-line ace-line old-record-id-AvqsdWJXPoBu5uxRwo5uuNZ3s3g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PG9wdzGrwoRdunxlUvMuoeKjsQf"><span style="font-size: 16px;">2025 Tax Year Long-Term Capital Gains Rates:</span></div><div class="ace-line ace-line old-record-id-Jfz5dBgrro0WtbxJOffudY26sqf"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="130;161;185;196" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="130"><col width="161"><col width="185"><col width="196"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Qu7SdUtjao5EEhxCbWmufy5MsNe"><strong style="font-size: 16px;">Filing Status</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-EqFqd3DaFoiutAxpQOyukF8Dsxj"><strong style="font-size: 16px;">0% Rate</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-BBGbdnkKxofvj9xfDBhuehF7s80"><strong style="font-size: 16px;">15% Rate</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PzVAd0pNCoR8GbxrKxOupa58sDe"><strong style="font-size: 16px;">20% Rate</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-TCesdu6PEojhsBxe2m2uHLVVs8b"><span style="font-size: 16px;">Single</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-C3zUdsoIlocJTqx2kf0uQl4xsVh"><span style="font-size: 16px;">$0 – $48,350</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-QJw3dSQAfob8CLxM9lwu4RC8sAf"><span style="font-size: 16px;">$48,351 – $533,400</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-JyWrdIDknoM3n0xZZrguYRxnsPd"><span style="font-size: 16px;">Over $533,400</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-SK0odyh53oIA1LxtSzNu8PO0swb"><span style="font-size: 16px;">Married Filing Jointly</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-JpvwdQ0xtoThcUxCtCvuQDRVsgf"><span style="font-size: 16px;">$0 – $96,700</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UTOPdlIYwoG86Tx6VJSubGQrsRg"><span style="font-size: 16px;">$96,701 – $600,050</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PlFRdXYiNoj7uTxXD4yuU5UOsch"><span style="font-size: 16px;">Over $600,050</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Rh7QdDSD6oQDlDxioRQuHQlqs8E"><span style="font-size: 16px;">Head of Household</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-U0qIdUwNmopw0KxVbxSulIiHskd"><span style="font-size: 16px;">$0 – $64,750</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PJVodAUrxoz9K4xoMd7uahL0sLc"><span style="font-size: 16px;">$64,751 – $566,700</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Px1PdOr8EoV77Lxpu2HubIFssmg"><span style="font-size: 16px;">Over $566,700</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-KSOFdUg75oS8yHxipotuYAJMsff"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-JS0ZdL6aEowlvHxMu3duAvMNsuh"><strong>3. Cost Basis Calculation Methods</strong></h2><div class="ace-line ace-line old-record-id-KVNQdK6WqoSk0zxu27RukgxNs0e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SJsedEHdjod1bwxoParuSsFusDq"><span style="font-size: 16px;">Cost basis is a key element in calculating capital gains. It refers to the total amount paid to acquire an investment, including purchase price and related fees.</span></div><div class="ace-line ace-line old-record-id-XytLduc3Wo2WmSxH1vOug5cpsId"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-RXIGdj7zoovqSOxuZAbu0vN7sag"><span style="font-size: 16px;">3.1 Common Calculation Methods</span></h3><div class="ace-line ace-line old-record-id-PQfdd8lvooQE5XxQ6PfuM1DMsZc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-M10Ede4HOotAHoxpuTouKWMjsXr"><span style="font-size: 16px;"><strong>First In, First Out:</strong> Assumes the earliest-purchased shares are sold first. This is the default method used by many brokers.</span></div><div class="ace-line ace-line old-record-id-D54adXKlWoOWkuxcJj0uMdlKsub"><span style="font-size: 16px;"><strong>Average Cost Method:</strong> Divides total purchase costs by total shares to arrive at a per-share average cost. Commonly used for mutual funds.</span></div><div class="ace-line ace-line old-record-id-KgptdCM7OovmcmxmROsuNcd7sIe"><span style="font-size: 16px;"><strong>Specific Share Identification:</strong> Investors designate which specific lot of shares to sell, allowing more flexible tax management.</span></div><div class="ace-line ace-line old-record-id-QWZsdtUxto4MINxgntVu29hssOh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-HpUDdBomKo3OdhxiK2puYZCAsPY"><span style="font-size: 16px;">3.2 Calculation Example</span></h3><div class="ace-line ace-line old-record-id-ZDV4dr3TVotR8mxn3JIuphZUsTg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UW63dAR6YoFfwSx0keQuDWwksHc"><span style="font-size: 16px;">Assume an investor makes three purchases of a stock:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-T95xd9CsToAe2oxqXtduKFrKsk8" data-list="bullet"><div><span style="font-size: 16px;">Purchase 1: 100 shares at $10/share</span></div></li><li class="ace-line ace-line old-record-id-RVUud8mwAoGGEYxjQ5yucLzDs8g" data-list="bullet"><div><span style="font-size: 16px;">Purchase 2: 50 shares at $15/share</span></div></li><li class="ace-line ace-line old-record-id-H23vdrPPHod2BKxRG5mupe2xs3g" data-list="bullet"><div><span style="font-size: 16px;">Purchase 3: 50 shares at $20/share</span></div></li></ul><div class="ace-line ace-line old-record-id-UOFFdVqDao1J4dxhbFNumL8zs8d"><span style="font-size: 16px;">Selling 125 shares using FIFO: cost basis = 100 × $10 + 25 × $15 = $1,375</span></div><div class="ace-line ace-line old-record-id-U2AXdoeaDoXqSPxWIFvulEE9sjd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-QJKpdbUkqogFsYxjspquJAansqe"><strong>4. Tax Treatment of Dividend Income</strong></h2><div class="ace-line ace-line old-record-id-Bv4ndC6uboojNIxf1F1uxGfOs4R"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-H5dzdffDHoM9jIx3ht2uylmIsld"><span style="font-size: 16px;">US stock investing involves not only capital gains but also taxable dividend income. Dividends are divided into qualified and non-qualified categories.</span></div><div class="ace-line ace-line old-record-id-ZvA4daOP1oWIQjxT3Cmu49zdsib"><span style="font-size: 16px;">Qualified dividends are taxed at the same preferential rates as long-term capital gains, while non-qualified dividends are taxed as ordinary income. For non-US residents, dividends paid by US companies are generally subject to 30% withholding tax, though residents of certain countries may claim reduced rates under tax treaties.</span></div><div class="ace-line ace-line old-record-id-OPkVdTInkoPdAoxItH9uxKtZsUh"><span style="font-size: 16px;">Investors can file <a data-lark-is-custom="true" href="https://www.irs.gov/forms-pubs/about-form-w-8-ben">Form W-8BEN</a> to declare non-US resident status and claim treaty-reduced rates.</span></div><div class="ace-line ace-line old-record-id-UE3WdtiS8okzO1xBG5HubS7hsDc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-LX2sdoOHeoHvCfxgdpaupYa2sJg"><strong>5. Practical Tax Optimization Strategies</strong></h2><div class="ace-line ace-line old-record-id-OqO7dMhhsoWCQPxFEsBuM1pes5e"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EWYjdQH7UovXUoxIcQWuDY5xsxd"><span style="font-size: 16px;">5.1 Tax-Loss Harvesting</span></h3><div class="ace-line ace-line old-record-id-KolhdBecposZePxkBJsua9gHsEf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VYwIduyQLoQgjNxdr02ur4uIsth"><span style="font-size: 16px;">Tax-loss harvesting involves selling losing investments to offset gains from profitable ones. Up to $3,000 in net capital losses can be deducted against ordinary income per year, with any excess carried forward to future years.</span></div><div class="ace-line ace-line old-record-id-XZTpd6MrboOOSIxGo0zuabxusAf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FC70dP5MxoTi89xt8MAuvQBZsCd"><span style="font-size: 16px;">Note the wash-sale rule: if you buy the same or substantially identical security within 30 days before or after the sale, the loss cannot be used for tax purposes.</span></div><div class="ace-line ace-line old-record-id-Azu2d7iqkoR0XJxVjHHuFFpSs2e"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-OFtkdZ8JfolXf8xx2aHuLkpksIh"><span style="font-size: 16px;">5.2 Long-Term Holding Strategy</span></h3><div class="ace-line ace-line old-record-id-F1VOdCKcUobhRXx2MmouPUJJscg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-J6b3diiTOodDh4xQconuU2w3sWe"><span style="font-size: 16px;">Extending the holding period beyond one year converts short-term gains into long-term gains, qualifying for lower tax rates. This is especially impactful for investors in higher tax brackets.</span></div><div class="ace-line ace-line old-record-id-JlOVdrfuXoJzTixg1xPuDowcs5c"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DMmOdGMSWoW6hCxC0aiu4svys9c"><span style="font-size: 16px;">5.3 Using Tax-Advantaged Accounts</span></h3><div class="ace-line ace-line old-record-id-ZHyzd0QyfoG1GzxAR70uJjSWs8d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OSp8dGy7QoRfT5xVtGeuXWNusch"><span style="font-size: 16px;">Investing through individual retirement accounts or <a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/401(k)">401(k)</a> plans allows for tax-deferred or tax-free growth, effectively reducing current-year tax liability.</span></div><div class="ace-line ace-line old-record-id-QSBydwaMAoc05rxe463uNVSHs0d"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-WnDfdMVcbokTipxOXwLuUgK9sKh"><strong>6. US Stock Tax Calculation Example</strong></h2><div class="ace-line ace-line old-record-id-Rb2PdH1ddoV4Z5xPZP6up9khsQg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-K7yHdvueNoroXhxHVdtumlmFsEe"><span style="font-size: 16px;">An investor purchases stock for $30,000 (including $100 in transaction fees) and sells it 15 months later for $40,000 (including $100 in transaction fees):</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-KTMUdGxlOoo6TXxgabfuDmVAsZd" data-list="bullet"><div><span style="font-size: 16px;">Cost basis: $30,000 + $100 = $30,100</span></div></li><li class="ace-line ace-line old-record-id-Hg75dDR9coH1y4xtryYuNJvSsgg" data-list="bullet"><div><span style="font-size: 16px;">Net sale proceeds: $40,000 − $100 = $39,900</span></div></li><li class="ace-line ace-line old-record-id-BuxadMgQUovdmxx1SVFuiT2gsIb" data-list="bullet"><div><span style="font-size: 16px;">Capital gain: $39,900 − $30,100 = $9,800</span></div></li><li class="ace-line ace-line old-record-id-ABD5dSQ4Xoh4BHxtaqXuJCCHslb" data-list="bullet"><div><span style="font-size: 16px;">At the 15% long-term rate, tax owed: $9,800 × 15% = $1,470</span></div></li></ul><div class="ace-line ace-line old-record-id-XGNpdRR9poMZDlx9b0juyWwFsKd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-W1qFdqw1YoL1xHxy3sQuHxnSsFe"><strong>7. US Stock Tax FAQ</strong></h2><div class="ace-line ace-line old-record-id-EoEMd2AYVoyu5Xx5ynSu6kRGsVd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-MBFvdYBi2oH4djxTU3ouRzsQsFd"><span style="font-size: 16px;">7.1 Are stock investment gains taxable? </span></h3><div class="ace-line ace-line old-record-id-G2CEdSPlAoOAPUxNi7YuZbPxs7d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VvFxdJhsEol028xoNLbuezXbsSe"><span style="font-size: 16px;">Yes. In the US, profits from stock investments are capital gains and must be reported and taxed accordingly.</span></div><div class="ace-line ace-line old-record-id-TRdBdfRkmo0Ar7xYwbtujgFysvh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-M1VKdPOg1o1YDPxh2xQufEyDsAf"><span style="font-size: 16px;">7.2 How much tax do US stock gains incur? </span></h3><div class="ace-line ace-line old-record-id-ZLiodHV4corwqWx5E7AuOG13sYg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QHCzdwR2IoaE95xfUYbujKyCssL"><span style="font-size: 16px;">It depends on holding period and income level. Short-term gains are taxed at ordinary income rates of 10%–37%; long-term gains qualify for preferential rates of 0%, 15%, or 20%.</span></div><div class="ace-line ace-line old-record-id-BOzidPWm9oygtBxl7Bcu9M0XsSf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Q41xds3aQokcrCxJBdMuGJ4csMg"><span style="font-size: 16px;">7.3 How much tax is owed on $300,000 in capital gains? </span></h3><div class="ace-line ace-line old-record-id-GIHydS0dnoN2KsxjjoJugpQzsdg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IS6TdK1GkoCB2axWhI7uiaTNsHg"><span style="font-size: 16px;">It depends on holding period and total taxable income. For long-term gains at the 15% rate, the tax would be approximately $45,000.</span></div><div class="ace-line ace-line old-record-id-RykZdrISKoJWx9xQiI0u0f4EsPe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-B0dAdhRPIo0I1ax7v48uC6N1szb"><span style="font-size: 16px;">7.4 Can stock losses offset taxes? </span></h3><div class="ace-line ace-line old-record-id-SpdJdnLdWoVZyGxujNwuFhgXsqb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-OMl1d0u9dol7hVxCNYVuB21AsWe"><span style="font-size: 16px;">Yes. Capital losses can offset capital gains, and up to $3,000 in net losses can also be deducted from ordinary income per year.</span></div><div class="ace-line ace-line old-record-id-LoXudEgCHoX54BxLCYFuBdgmsnh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-AHXDdqC0aoqBJmxxr0CuyK6KsJd"><span style="font-size: 16px;">7.5 Is the capital gains tax rate 15% or 20%? </span></h3><div class="ace-line ace-line old-record-id-EUkjdUhdRocydLxqLRTuWBnxsGc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GvczdoZjIoLSccxuDwBuBpwfs9c"><span style="font-size: 16px;">Both are possible. Most investors fall under the 15% long-term rate, but high earners above certain thresholds pay 20%.</span></div><div class="ace-line ace-line old-record-id-BIAPdn2kgo5JekxilATuOgGlsLf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FslRdFtFNon9ksxVPituMvsuswO"><span style="font-size: 16px;">7.6 How do you calculate stock taxes? </span></h3><div class="ace-line ace-line old-record-id-B76AdMSOHotRKDxDII4uYjZKs4b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-R1g8dxmdGoK5X8xbUY9uPN3wsLc"><span style="font-size: 16px;">Formula: Tax = Capital Gain × Applicable Rate, where Capital Gain = Sale Price − Cost Basis (purchase price plus transaction fees).</span></div><div class="ace-line ace-line old-record-id-QFwgdmwCFopmncxTFBsuZpHWsLf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-W9q3dPqr4ozwHCxn6Z1uOLhJsXA"><span style="font-size: 16px;">7.7 How much tax applies to day trading? </span></h3><div class="ace-line ace-line old-record-id-K84odXr29olakSxf5k8ubUgvsKQ"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FC0kdxQdaoU3xixOsFzun2GfsEc"><span style="font-size: 16px;">Day trading gains are short-term capital gains taxed at ordinary income rates, up to 37%.</span></div><div class="ace-line ace-line old-record-id-A2eMd8ZNyoGb1xxCjtHupKgHs5b"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ODP2daFfxod5S3xTjdZu4O5UsSe"><span style="font-size: 16px;">7.8 Do investors in US stocks need to pay taxes? </span></h3><div class="ace-line ace-line old-record-id-UPMVdSxbOoMDy9xauMIuxDbFs0g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Eu9zd6u2JoDDTqxUVLXuc1tcsLG"><span style="font-size: 16px;">Yes. Both US residents and non-residents are required to pay taxes on gains from investing in US stocks in accordance with applicable rules.</span></div><div class="ace-line ace-line old-record-id-WFFXdHkiwonZIxxUhFpu2zylsDc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-LoGEdKZJpotMngxZSG3uUy5Qsof"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-CfRUd2jaCoZbGfxigcNunSj4sde" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/what-is-stocks-/1" style="font-size: 16px;">What Is Stocks?</a></div></li><li class="ace-line ace-line old-record-id-CZGZdoJhUoW1iWx6Ktuu9hg9s5d" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ</a></div></li><li class="ace-line ace-line old-record-id-IzlLd2dZyon2gPxrFZnux3Eiscc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stock-dividends-explained-375847313854307328" data-lark-is-custom="true" style="font-size: 16px;">US Stock Bonus Shares Explained: Understanding Stock Dividend Distribution in the US Market </a></div></li><li class="ace-line ace-line old-record-id-J50UdQyjIoCxbvxAH3ruYRDPscb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/corporate-actions-explained-378074245807356928?handleDefaultLocale=keep" data-lark-is-custom="true" style="font-size: 16px;">Corporate Actions Explained: Stock Splits, Reverse Splits, Rights Issues, and Shareholder Meetings </a></div></li><li class="ace-line ace-line old-record-id-OJD5ddxGjoZRHmxsRORuki5Bswb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-bonus-shares-explained-378075302369310720" data-lark-is-custom="true" style="font-size: 16px;">How to Open a US Stock Trading Account: A Beginner's Guide</a></div></li></ul><div class="ace-line ace-line old-record-id-BA5PdyHNko6Erdx3LTgu497tsre"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Lj4GdHXpOokjtex7QN5usM7Osc2"><span style="font-size: 16px;">Disclaimer:</span></div><div class="ace-line ace-line old-record-id-B3Bjdz7fGo5uPAxdnm9u9pR3svf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NgY3dHvF4os2p2xAqVouSC3vsMg"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-RndidvnYmomAjfx0azluDiwZsfd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-P8tSd7BbIoTwWSx4IyeuycUrsqc"><span style="font-size: 16px;">By participating in these investment activities you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
The Complete Guide to US Stock Risk Management: Navigating Investment Pitfalls
<div data-page-id="CBJidX0Mwo1p3LxwMsUudWpCsdj" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-SC9qdxjIpo9giqxRxHtukuqWsIf"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-S6O4dDUGnot7KIxeqnxuAWJgszb" data-list="bullet"><div><span style="font-size: 16px;">Many investors have misunderstandings about US stock market risks, often confusing volatility with actual risk.</span></div></li><li class="ace-line ace-line old-record-id-QReTdCHnbo3zCBxHGK5u5uB9s5b" data-list="bullet"><div><span style="font-size: 16px;">Market timing, panic selling, and over-concentration of portfolios represent the most common investment pitfalls.</span></div></li><li class="ace-line ace-line old-record-id-VBlmdrNOeoZhJhxsx1Qubebzs4e" data-list="bullet"><div><span style="font-size: 16px;">Scientific position sizing, alongside structured stop-loss and take-profit strategies, form the core framework of effective risk control.</span></div></li><li class="ace-line ace-line old-record-id-N8badhEohoLcAgxYErcuwbMosJh" data-list="bullet"><div><span style="font-size: 16px;">Investing in US stocks requires attention to market-specific risks, including currency fluctuations, policy shifts, and delisting threats.</span></div></li></ul><div class="ace-line ace-line old-record-id-X17ZdkBenovOLcx7MRTuty1hsDf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Moxtd2vmxoBzKZxrEbXu9ePMsjn"><strong>1. What is Investment Risk?</strong></h2><div class="ace-line ace-line old-record-id-SPdFdmmZWopaxxxdzmeuk1v0s5b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PxGGdIGZnotrHyxvXGluQ0dRscF"><span style="font-size: 16px;">In US stock investing, many people simply interpret risk as price fluctuations, commonly known as volatility. However, real risk is the probability of an adverse outcome, most directly manifested as the probability of permanent capital loss.</span></div><div class="ace-line ace-line old-record-id-F6GJdhhN8oNqipxap6uuEJQYs0d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UtM5d8JtkosO2rxfCEXuGq7PsMb"><span style="font-size: 16px;">Volatility is merely an expression of short-term price movements, not risk itself. Risk only converts into an actual loss when an investor panics and sells at a low point, turning a paper loss into a realized one.</span></div><div class="ace-line ace-line old-record-id-XNKSdsGiIoNQZkxulC6uFk0ssoc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UfjLdI8JTov8esxyxCDucsaYseg"><span style="font-size: 16px;">For investors engaging in diversified asset allocation through licensed brokerages partnered with MEXC, understanding this distinction is crucial. Whether investing in US stocks or other assets, one must differentiate between short-term volatility and long-term risk to avoid making erroneous decisions based on a misunderstood concept of risk.</span></div><div class="ace-line ace-line old-record-id-W3oKdXcbnoOoFxx4W4NuWCzQsve"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ASw4dHD4XohTDDxwP3tu3C2bsRe"><strong>2. Common Investment Pitfalls and Their Dangers</strong></h2><div class="ace-line ace-line old-record-id-Kk0rdyTA6oqtlSxNN8suDc5zsDe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SCGjdlqzGoDIUdxXbCTupMtNsbc"><span style="font-size: 16px;">Pitfall 1: Believing Market Timing Yields Excess Returns</span></h3><div class="ace-line ace-line old-record-id-EUfOdf302oUTT6xVmuxuM2tBs7q"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Nh8CdY6FjoeYigxfu8nuBFNesEy"><span style="font-size: 16px;">Many investors believe they can consistently buy at the market bottom and sell at the top. However, research data shows that even professional investors struggle to accurately predict market movements over the long term. Crucially, the market's sharpest gains often occur immediately following its steepest declines. Missing out on just a few of the market's best-performing trading days can severely diminish your long-term returns.</span></div><div class="ace-line ace-line old-record-id-DrpAdLUhIogODfx6mlNuRJCdswd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-P5kld3ykdo6rvOx3ROpu3lJksth"><span style="font-size: 16px;">Rather than attempting to time the market, a DCA strategy is more effective. By investing a fixed amount at regular intervals, this approach automatically buys more shares when prices are low and fewer when prices are high, effectively smoothing out your overall investment costs.</span></div><div class="ace-line ace-line old-record-id-WeJvdMptmouJb8xuutluFT16s3c"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FL1ndx6QLozlKvxtBiVuLZ1Ysws"><span style="font-size: 16px;">Pitfall 2: Assuming High Risk Automatically Guarantees High Returns</span></h3><div class="ace-line ace-line old-record-id-PHdzd3zU2oQsFWx1AGXuMIGMsac"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VJXYdT9SuoOHrUxg9FmuBPs9scf"><span style="font-size: 16px;">While taking on higher risk can theoretically yield higher rewards, this relationship is neither linear nor guaranteed. Higher risk inherently carries a greater probability of substantial loss. Many investors overlook a fundamental truth: a high return is a potential compensation for bearing high risk, not a guaranteed outcome of it.</span></div><div class="ace-line ace-line old-record-id-HexRdfHJwogfrfx8v61uvbggsPd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IoEKd8vWXoG8LHxd22ju9607sDd"><span style="font-size: 16px;">When building an asset allocation strategy, investors should select a portfolio that aligns with their personal risk tolerance, rather than blindly chasing high yields while ignoring the underlying risks.</span></div><div class="ace-line ace-line old-record-id-OGAVdaZ26o6xPzxeRTjuTDHHste"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-MoPPdQspkoBRIJxw2jbuOhXOsQh"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-Eg4OdeB8goyJVvxxSVNudk4msVc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-HB85deC0FoQzLRxPGyPuGhESsRe"><strong>3. Position Management, Stop-Loss, and Take-Profit Strategies</strong></h2><div class="ace-line ace-line old-record-id-RYwYdwwFPoykE3x2WU5uKMMysfd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-M7k8dpzYGosz9fxmD4duZtOHsFc"><span style="font-size: 16px;">3.1 Core Principles of Position Management</span></h3><div class="ace-line ace-line old-record-id-PmSydFaLNoqkYXxGJbCuUd4JsPb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-S6jZdzO4OoeEj7xMAF2uX60Ms4e"><span style="font-size: 16px;">Scientific position management is the foundation of risk control. Concentrating all your capital into a single stock or sector significantly escalates the overall risk of your portfolio, even if that sector is currently a top performer.</span></div><div class="ace-line ace-line old-record-id-M9RwdnljmoywOxxHYnsuC4UfsSh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DWRqdt0G8oXstlxqSLluEAgysjf"><span style="font-size: 16px;">The principle of diversification requires investors to allocate capital across different industries and varying market capitalizations. Research demonstrates that appropriately incorporating small-cap stocks into a large-cap portfolio does not necessarily increase overall risk. Instead, it can actually improve portfolio efficiency by lowering asset correlation.</span></div><div class="ace-line ace-line old-record-id-F0DJdvTFcoKDT5x14fBuymFDsic"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ZQVidU93UokZ7FxPHXWuELfJsae"><span style="font-size: 16px;">3.2 Methods for Setting Stop-Loss and Take-Profit Levels</span></h3><div class="ace-line ace-line old-record-id-HH3kdzw34oA3w9xb7H4uiKV0s6g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-A04BdRMtPoC28UxDJYYu0ZdMsSb"><span style="font-size: 16px;">A stop-loss is your final line of defense for capital preservation. Setting a rational stop-loss point should be dictated by your personal risk tolerance and specific market volatility characteristics, rather than arbitrary numbers. A stop-loss that is too tight is easily triggered by normal market noise, while one that is too wide defeats its protective purpose.</span></div><div class="ace-line ace-line old-record-id-Sldbdb6XyoW4aGxV6VbuNdZpsfg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PMHxdzTpRoolvZxsmAZuoXrFsFd"><span style="font-size: 16px;">Securing profits is equally vital. Executing a take-profit order once your pre-set target is met prevents greed from eroding your gains. Mature investors make it a habit to regularly evaluate their positions and adjust their targets in response to changing market dynamics.</span></div><div class="ace-line ace-line old-record-id-EuCUduhrxo1VcLxIDd7uixz9sub"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-RToDd16EKoQ0z0xnFpwu8y4ss0n"><strong>4. Unique Risk Factors of US Stock Investing</strong></h2><div class="ace-line ace-line old-record-id-E51Adkv5gondczx6QqyuxzgMsuf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ZMOfdVXvAojxJ4xZ0HFumv52sje"><span style="font-size: 16px;"><strong>Foreign Exchange Risk:</strong> For non-USD investors, fluctuations in the US dollar exchange rate directly impact actual investment returns. Even if a stock generates a positive return, exchange rate losses can erode or completely offset investment profits.</span></div><div class="ace-line ace-line old-record-id-EsB0dRGGBo84nzxjzn0u0zZ1sid"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PRARdJs0Xon0Ltxc9ciu7AMMsdh"><span style="font-size: 16px;"><strong>Policy and Regulatory Risk:</strong> Shifts in US monetary policy, tax laws, and industry regulations can have a major impact on specific stocks or the broader market. Macroeconomic factors, such as adjustments to tariff policies and interest rate fluctuations, require continuous monitoring.</span></div><div class="ace-line ace-line old-record-id-Xue5diEopogocExxu7IudVdysDd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-I342dO9MfoWl3jxtIaEu1yzkszg"><span style="font-size: 16px;"><strong>Delisting and Compliance Risk:</strong> The US stock market imposes strict compliance requirements on listed companies. Factors such as a stock price remaining below required thresholds for an extended period, financial fraud, or failure to file reports on time can trigger delisting, resulting in severe losses for investors.</span></div><div class="ace-line ace-line old-record-id-HiF1dBLAlouIYYxZA2HuuKphssG"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ZY8GdS0Zto5RFKxT2y3uNe4wsgd"><strong>5. Psychological Grounding and Trading Discipline</strong></h2><div class="ace-line ace-line old-record-id-MI5fdBxRdoDNA9xTPaUuXo7XsKh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-CofedKlakoUGCZxttdhuLhhUsye"><span style="font-size: 16px;">Successful investing demands not only the right strategies but unwavering execution. Remaining calm during market turbulence and refusing to let fear or greed dictate your actions is the absolute key to long-term profitability.</span></div><div class="ace-line ace-line old-record-id-Zda9dJajUoLqwWxXr9nuy6Xysxf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BRmndF5gToQ1GWxCbLZufkkWs8e"><span style="font-size: 16px;">Construct a clear investment plan and adhere to it strictly, avoiding frequent strategy adjustments driven by short-term emotional swings. Through licensed brokerages, MEXC provides users with a diverse suite of investment tools and educational resources, empowering investors to build a systematic approach and cultivate a healthy investing mindset.</span></div><div class="ace-line ace-line old-record-id-J5A9dJVQKoNCBYxsBzjuyzxesPd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Y6XRdAaDfomFRjxJtevurcUosvd"><span style="font-size: 16px;">The power of compounding requires time to manifest. Maintaining investment discipline and committing to a long-term perspective remains the most reliable path for retail investors to achieve success in the market.</span></div><div class="ace-line ace-line old-record-id-EGzzdp7Jvoj8IwxKTrHumeT2s0f"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-M6jcdO5dUoqqmuxXQlQuvLTes9E"><strong>6. FAQ</strong></h2><div class="ace-line ace-line old-record-id-FNQYdvyYzoNdQZxyoHAuatblsef"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-A7EtdMyK6oh1P0xvW7bumfMWsNf"><span style="font-size: 16px;">6.1 What is a Risk Premium, and how is it calculated?</span></h3><div class="ace-line ace-line old-record-id-I8pxdvS2HormR6x8877uhiwlsKf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D8PrdvHI8oTc4axiePfuOLEqs6d"><span style="font-size: 16px;">A risk premium is the excess return an investor requires to take on additional risk. The formula for calculating it is <strong>Risk Premium = Expected Rate of Return - Risk-Free Rate</strong>. Investors usually use the yield on government bonds as a benchmark for the risk-free rate.</span></div><div class="ace-line ace-line old-record-id-VzfYd6nVooFjYexkULUuYvtfswe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-KjUVdhPX0ot5RFxzkn5ujwiWs7c"><span style="font-size: 16px;">6.2 How does the Relative Strength Index help to manage risks?</span></h3><div class="ace-line ace-line old-record-id-OdX3dF5G0ovL03xEfKaurMXpscf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TPgJdAgaHovNrVxcyQnu8vdzslc"><span style="font-size: 16px;">The Relative Strength Index (RSI) is a technical tool that measures the speed and magnitude of stock price changes, with a value ranging from 0 to 100. Generally, an RSI above 70 is considered an overbought signal, while an RSI below 30 is viewed as an oversold signal, helping investors judge the timing for buying and selling.</span></div><div class="ace-line ace-line old-record-id-KnlAdfSazow0YjxhG07uUaYAsrB"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-KUqqdGe1hoQGbyxnPgsuJ4m4sKb"><span style="font-size: 16px;">6.3 What are the main pillars of risk management?</span></h3><div class="ace-line ace-line old-record-id-Lha0dk5o6ogNGrxx23guMpQ1swh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RkqhddGLPoJ9pvxDFRLuZOqJs6b"><span style="font-size: 16px;">Effective risk management consists of four core stages: risk identification, risk assessment, risk control, and risk monitoring. In the investment field, this means identifying potential sources of loss, assessing the probability and magnitude of those losses, implementing control measures such as diversification, and continuously monitoring portfolio performance.</span></div><div class="ace-line ace-line old-record-id-HSvXdCoBToYkx4xdInou1vCCsDd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JQ0XdT3fToEPBbxmNoKuzZmnsQz"><span style="font-size: 16px;">6.4 How can I avoid the trap of "chasing highs and cutting lows"?</span></h3><div class="ace-line ace-line old-record-id-ZJizdIUCvo2GCnxWmHXubp3Osff"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ot29dJF5Qo8oUqxg5SmuzUZws5b"><span style="font-size: 16px;">The key is to formulate a clear investment plan and strictly adhere to it. Utilizing a DCA strategy automates the investing process and reduces emotional decision-making. Additionally, focusing on long-term value rather than short-term price fluctuations helps maintain investment discipline.</span></div><div class="ace-line ace-line old-record-id-KJAGd1K4koCkxnxWJ8mu55BJs9e"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-CLFCdBujhoxEsAxaRfIumDsSsFc"><span style="font-size: 16px;">6.5 How important is compounding in long-term investing?</span></h3><div class="ace-line ace-line old-record-id-IVcCd5aWdoUXCbxP9d9uLov1sYc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-M5rWdnVSnoPmhAxzShiuCtwhsbb"><span style="font-size: 16px;">The compounding effect is the core driving force behind long-term investing. Based on an annualized return rate of 7%, an initial investment of 100,000 dollars can grow to over 1.5 million dollars over a forty-year period. Time and continuous contributions are the absolute keys to unleashing the power of compounding.</span></div><div class="ace-line ace-line old-record-id-D2YpdVlzYof3wvxUCxru8L3Hsaf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HSyudko0coVLpzxY8luu7hDssLd"><strong style="font-size: 16px;">Recommended Readings:</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-ILkNdygYvo8POCxUDkvuyXVqsO0" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-ToeKd2mdzo0HAQxA0o9uCSQ0shd" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-HEM2d71UuocEhZxpXPxuGrDts0s" data-list="bullet"><div><a href="https://www.mexc.com/support/article/key-economic-events-impacting-the-us-stock-market-370641117706798080" data-lark-is-custom="true" style="font-size: 16px;">Key Economic Events Impacting the US Stock Market</a></div></li><li class="ace-line ace-line old-record-id-BJoUdGuAxoSdr7xrwViuImwjsO1" data-list="bullet"><div><span style="font-size: 16px;"><a href="https://www.mexc.com/support/article/us-stock-dividends-explained-375160462684321792">Understanding US Stock Dividend Cycles: Ex-Dividend Dates and Payment Dates</a></span></div></li><li class="ace-line ace-line old-record-id-W9nudV9P7oHwDfxCcO0urusgsVh" data-list="bullet"><div><span style="font-size: 16px;"><a href="https://www.mexc.com/support/article/what-events-and-dates-to-note-when-buying-us-stocks-a-complete-guide-to-shareholders-meetings-dividends-and-ex-dividend-dates-370876112547430400">What Events and Dates to Note When Buying US Stocks? A Complete Guide to Shareholders' Meetings, Dividends and Ex-Dividend Dates</a></span></div></li></ul><div class="ace-line ace-line old-record-id-FJQydPX23oaZykxx254uZ9xYspw"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RTnJdqFYXoZENBxmZ6wuRWBhsoo"><span style="font-size: 16px;"><strong>Disclaimer</strong>:</span></div><div class="ace-line ace-line old-record-id-Jo1Zd9TaPotmr6xnHciuWkMpsJf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TpwmdhFn3oh3TVxOY1huiEM4sXd"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-FxmRd5lZJoFss2x9kW2u1XVHsAc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-L862dWSocoxQUGx5M9kuwQi5swb"><span style="font-size: 16px;">By participating in these investment activities you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
Free US Stock Analysis Tools: A Complete Guide to Essential Websites for Beginners
<div data-page-id="BObqdano1oU4KZxPJ1cuuiebsVd" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-YQBtdd7Fvo6dlDxctz3uwPNgspg"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-StwodhFMzogEtxxngbKuZtuBs4e" data-list="bullet"><div><span style="font-size: 16px;">This guide covers more than 15 practical US stock analysis tools, including charting, financial statement analysis, and stock screening.</span></div></li><li class="ace-line ace-line old-record-id-Ub3kdCoEBonMCUxTYcTubgejszg" data-list="bullet"><div><span style="font-size: 16px;">Tools are organized by function, from beginner-friendly resources to more advanced platforms, helping investors quickly find the tools that best fit their needs.</span></div></li><li class="ace-line ace-line old-record-id-XoKGdiBdHoORETxqjVMuRyMKsOh" data-list="bullet"><div><span style="font-size: 16px;">Combined with MEXC's platform advantages, these tools can help users build a complete investment information system.</span></div></li></ul><div class="ace-line ace-line old-record-id-ALsbdXUE2omPOxxDTejuLsLAsNu"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Da53dPrXqoMUJWx8HFPu1xu0sxe"><strong>1. Why You Need US Stock Analysis Tools</strong></h2><div class="ace-line ace-line old-record-id-TqD6dRqASoLL3ax8OuOuFgWWsXf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GAyxdowFzoLApUxW586ue9kTsqg"><span style="font-size: 16px;">For investors interested in the US stock market, access to accurate and timely market information is essential. The US stock market includes thousands of listed companies and generates a large volume of price movements, financial data, and market news every day. Without the support of suitable analysis tools, it can be difficult to make rational decisions based on such a large volume of information.</span></div><div class="ace-line ace-line old-record-id-LvwKdlnQroghM9xuiKLucgVVsle"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SxiZdZFYuoMOymxNUX7u9c1nsKd"><span style="font-size: 16px;">High-quality stock analysis tools help investors monitor real-time prices, review historical trends, analyze company fundamentals, screen for investment opportunities, and track institutional or insider activity. Whether you are new to US stocks or already have investing experience, choosing the right tools can significantly improve the quality and speed of investment research.</span></div><div class="ace-line ace-line old-record-id-TYVgdmPu8o5NiKxHwkZuOllbsTP"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PdUdd0JbfoCMxYxO2N6uZSppsHh"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-IofpddJ3OoJl0xxgFsxuWkGAs7g"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-OWmcdGmOIoKt8NxUHFZuVkGms5d"><strong>2. Official and Authoritative Data Sources</strong></h2><div class="ace-line ace-line old-record-id-Iifod9m2HozBkSxyuskunw2DsSc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-B7lUdFac0ojB15x2fNguJ8aisAd"><span style="font-size: 16px;">2.1 US Securities and Exchange Commission (SEC)</span></h3><div class="ace-line ace-line old-record-id-D42HdsyxVoltVxxyX7yu0c31sCc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Sg0ddBQjioxhmqxSvfMu4n1bsyb"><span style="font-size: 16px;">The US Securities and Exchange Commission (<a data-lark-is-custom="true" href="https://www.sec.gov/">SEC</a>) is the official source of financial statement data for US-listed companies. All companies listed in the United States are required to submit financial reports to the SEC, and investors can access these original filings free of charge through the SEC website. The main filing types include annual reports (10-Ks) and quarterly reports (10-Qs). Annual reports contain complete business descriptions, financial data, and risk disclosures, while quarterly reports reflect a company's most recent operating results. For investors who want to conduct in-depth fundamental analysis, this is the most authoritative source of primary financial disclosure.</span></div><div class="ace-line ace-line old-record-id-FNIQdx6Mvomy1axbxoSuiyzqsWg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-KVTTdNloXoxOZexHeLbuZ0pMs4T"><span style="font-size: 16px;">2.2 Nasdaq's data platform</span></h3><div class="ace-line ace-line old-record-id-QKTtd3gweorBgLxuy7BumF0Qs8b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QwojdfffaoVRUtxpJ7HucNOWsNc"><span style="font-size: 16px;">Nasdaq provides an official <a data-lark-is-custom="true" href="https://data.nasdaq.com/">data platform</a> covering financial, economic, and alternative datasets. Investors can access standardized financial data, economic indicators, and market statistics. This platform is particularly useful for professional users who need to perform quantitative analysis or backtest strategies.</span></div><div class="ace-line ace-line old-record-id-CVo7dAOTVoaDFmx97XhuLNHfsgf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-KWybdPuGiojvHlxPRilu6FK8sSc"><strong>3. Free Charting and Market Analysis Tools</strong></h2><div class="ace-line ace-line old-record-id-NQ7Wd4rcwoqoIPxsJHKuc5Axsyf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Nv2ddPnkpo25u4x6NWVukevysXc"><span style="font-size: 16px;">3.1 Professional charting platform</span></h3><div class="ace-line ace-line old-record-id-JbNzdcfGYoQtc1xoij4uCblHsSb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YuScdlfCToMtCSx89Duuo2NLsDc"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.tradingview.com/">TradingView</a> is one of the most popular charting tools in the world and supports real-time quotes and historical price trends for US stocks, foreign exchange, futures, and many other financial instruments. Its core advantage is its powerful charting suite, which includes hundreds of built-in technical indicators. Users can also create custom indicators and trading strategies. The free version is sufficient for most investors and includes access to historical price data, comparing multiple assets, and adding technical indicators.</span></div><div class="ace-line ace-line old-record-id-SVald3SDYolESXx93LAufpxJsVd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-G4RcdpVv9oj2AKxqZyDubFocs2g"><span style="font-size: 16px;">3.2 Comprehensive financial information portals</span></h3><div class="ace-line ace-line old-record-id-KIq3d0vaaofajnx7w6wuZzEqsGc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QjZ4dUByloJVzFxyZDFuvmZLsdE"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://finance.yahoo.com/">Yahoo</a> Finance is one of the most established financial information platforms, offering real-time US stock quotes, basic financial data, news, and stock screening tools. Investors can access historical price records, dividend payment information, and stock split data free of charge. Its simple and intuitive interface makes it especially suitable for beginners.</span></div><div class="ace-line ace-line old-record-id-XN9ndqpapocWQRx5NosuAalksye"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EDHRd8x4aolOQWxxIPtunKjGsfd"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.investing.com/">Investing</a> is an international financial information portal that supports the viewing and downloading of historical US stock price data. Investors can access full historical datasets including open, high, low, close, and trading volume data. This is particularly useful for users who want to run backtests on trading strategies.</span></div><div class="ace-line ace-line old-record-id-Dy4DdtJ3RojdNYxWzS2umDSNsOf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-HKimd787Hot6JDxuviMuABYFsag"><strong>4. Financial Statement Analysis Websites</strong></h2><div class="ace-line ace-line old-record-id-LcP1dXOXaolFYmxQZGPuYuw4sch"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TwX8dzd4DoswIDxBZgHuRcq0sad"><span style="font-size: 16px;">4.1 Morningstar investment research platform</span></h3><div class="ace-line ace-line old-record-id-ALXHdkQpcoSTF4xuyk6ue8NosTd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AqrWdXW9Qo2Ch8xiAHouOb2espb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.morningstar.com/">Morningstar</a> is a globally recognized independent investment research institution that provides fundamental data and analysis ratings for US-listed companies. Free users can access key financial indicators, financial ratios, and three major financial statements covering the past five years. The platform presents data in a clear and easy-to-understand format, making it particularly suitable for investors who are just beginning to learn financial statement analysis.</span></div><div class="ace-line ace-line old-record-id-YBrgdenwKoLITcxbWsnut5xDssg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Eiz4dYC4OoYryzxzFBuu8baes7g"><span style="font-size: 16px;">4.2 Long-term financial data platform</span></h3><div class="ace-line ace-line old-record-id-Dwz0dvAhJoMQeBxhqvIup11Qs3e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-F8Wod6drKojbe5xVEy1uiCpNsUC"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.roic.ai/">Roic.ai</a> focuses on financial statement data for US stocks. Free users can access up to 30 years of historical financial data, which is uncommon among similar tools. The platform also provides explanations of financial terms and calculation formulas to help investors better understand each indicator. In addition, users can read full transcripts of quarterly earnings conference calls.</span></div><div class="ace-line ace-line old-record-id-XOLBdWRMIohX2IxeyIXuOlXlsfg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-VZd8d7FqToijCBxm80ju7eYhs9e"><span style="font-size: 16px;">4.3 Professional financial metrics database</span></h3><div class="ace-line ace-line old-record-id-EeeddueMgo3id4xGOatuojUQscf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ijy3dGxYRoeLwcxOHy4uTvwQsHf"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.gurufocus.com/">GuruFocus</a> provides comprehensive financial metrics with detailed and transparent formula explanations. In addition to financial statement data, it also offers information on institutional holdings and the portfolios of well-known investors, making it an important resource for analyzing ownership trends.</span></div><div class="ace-line ace-line old-record-id-KR9xdTr5tojJ5kxrASRuoY8Osec"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-G6uldEAONoYX1DxJ7DduW06Iscc"><strong>5. Stock Screening and Selection Tools</strong></h2><div class="ace-line ace-line old-record-id-X143dpJgBohOQOxevGsuozOXs3d"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-IQaNdujOjotRAvxi46Munctasse"><span style="font-size: 16px;">5.1 Visual market heat map</span></h3><div class="ace-line ace-line old-record-id-J2zfdf0ByoRqJsxpK0kuCCYFsEg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-L5jqdNNKyotvEhxK07QuHb9TsAb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://finviz.com/">Finviz</a> presents the US stock market through an intuitive heat map, allowing investors to quickly see sector and individual stock performance at a glance. Its stock screener supports multi-factor filtering based on both fundamental and technical indicators, helping users quickly identify stocks that fit their investment strategies.</span></div><div class="ace-line ace-line old-record-id-NsDUdOPgOo5rczxPZD2ud50CsId"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-CdEKd8ULdoBW39xGPLsu0CRCsDW"><span style="font-size: 16px;">5.2 ETF research database</span></h3><div class="ace-line ace-line old-record-id-S0zqd5hvgoWQqRxBJE2uC8nyse1"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YWHMdyIbqopOtTx32LMuhSNwscb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://etfdb.com/">ETF Database</a> is a specialized website focused on exchange-traded funds. Its classification system is detailed and well organized. Investors can screen ETFs by asset type, geographic exposure, and expense ratio, and compare two funds based on holdings, fees, and historical performance. For beginners who want to reduce risk through diversification, this is an ideal resource for learning about ETF products.</span></div><div class="ace-line ace-line old-record-id-TpCXdWSS4oCQbnxRV3XuuYnIspd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-CFJLd2TGvon57Pxzbn9uvXeXsVb"><strong>6. Research Reports and Market News</strong></h2><div class="ace-line ace-line old-record-id-FmzRdISIuorLdmxNc7Cuk3tgsQg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JjoIdt7o2oV662x0xIluSR1jsmh"><span style="font-size: 16px;">6.1 Investment research community platform</span></h3><div class="ace-line ace-line old-record-id-ZRa0dG8ARoNhkMxkRXYuiFCxsKd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Rel0dkjAwoFX5xxRtWPuOz9nspb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://seekingalpha.com/">Seeking Alpha</a> brings together research reports from analysts and investors. Users can read in-depth articles and both bullish and bearish views on individual stocks. The platform also provides key summaries and full transcripts of earnings conference calls, helping investors quickly understand management strategies and market outlook.</span></div><div class="ace-line ace-line old-record-id-FpdgdiWuaoLL2gxxLd7uMeHJsIb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Tvoxdg2uxoAp5pxgIhCuLKQvsTd"><span style="font-size: 16px;">6.2 Analyst rating tracking tool</span></h3><div class="ace-line ace-line old-record-id-RI3wdsWWioiI3TxY88juVTdhsmd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QbIod5l1UooonxxMGvBum9tpsIc"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.tipranks.com/">TipRanks</a> is known for tracking and ranking the historical forecasting accuracy of Wall Street analysts. Investors can view both analysts' ratings and their past performance, making it easier to assess the credibility of their recommendations. The platform also offers tracking of institutional investors and insider trading activity.</span></div><div class="ace-line ace-line old-record-id-PpOhdmHzxoGYXfx5PtKuHhqastf"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-SVyMdDmXGoXdwVxvr4puKu7Sshb"><strong>7. Investment Information Services on MEXC</strong></h2><div class="ace-line ace-line old-record-id-JGeedeM6hoxf8sxOynKuoGAXsRh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KUWXdyZi2o0PFMxA1Ptu9HpysSg"><span style="font-size: 16px;">As a leading global digital asset trading platform, MEXC also places strong emphasis on providing comprehensive market information services. Through MEXC's partner licensed broker, users have access to professional charting tools that support a wide range of technical indicators. These tools allow users to clearly view price trends and trading volume changes across different assets, helping improve investment efficiency.</span></div><div class="ace-line ace-line old-record-id-IvkudTc7JoOLzOxxg1DuqZRfsZF"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-YqyOdK5XWo3zFAxaDNbuWe5esgg"><strong>8. FAQ on US Stock Analysis Tools</strong></h2><div class="ace-line ace-line old-record-id-JuoAdPKdkovuTWxgyUXuJWPgs3g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JBgvdXTG3oOWL0xWHEfu3Gtis6d"><span style="font-size: 16px;">8.1 What are some free tools for analyzing US stocks?</span></h3><div class="ace-line ace-line old-record-id-VI9CddqF2oyIoux7R97uOzkUske"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-M12cdmpH7ogwOExTPIdujtCrsIb"><span style="font-size: 16px;">Popular free tools include Yahoo Finance, comprehensive financial information portals, and professional charting platforms. These tools provide real-time quotes, historical price trends, and basic technical indicators, which are sufficient for most investors' daily needs.</span></div><div class="ace-line ace-line old-record-id-Ej1mdCXmzoiezAxtEkku2HevsFb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WjqndeadIosFTExHnubuokS9sOc"><span style="font-size: 16px;">8.2 How can I access original financial reports of US-listed companies?</span></h3><div class="ace-line ace-line old-record-id-KvPHdJzGIon304xmjRXuvE8Bsbd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KE9IdJfqFoA0KlxZSAXuHRE1sde"><span style="font-size: 16px;">The official website of the US Securities and Exchange Commission (SEC) is the most authoritative source for original financial reports. All annual reports and quarterly reports filed by listed companies can be viewed and downloaded free of charge.</span></div><div class="ace-line ace-line old-record-id-GXj8dMwuGonykMxrhSJuEOlGsbh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Hap3dZbhjojiOjxecDQu4hbjsOb"><span style="font-size: 16px;">8.3 How do stock screening tools work?</span></h3><div class="ace-line ace-line old-record-id-OMvAdpxIkoHoZDxqmpQuPeEUsNb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QsoydyBzEoZuGjxeTbBugUE6s2d"><span style="font-size: 16px;">Most screening tools allow users to filter stocks based on criteria such as market capitalization, price-to-earnings ratio, dividend yield, and sector. After setting the desired conditions, the system automatically generates a list of stocks that meet the requirements.</span></div><div class="ace-line ace-line old-record-id-SNWAdwX7vojGt2xfL9nuxlLCsme"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-LGOSdV9ZwogIx2xWE9Uu9IDlssb"><span style="font-size: 16px;">8.4 Where can I view institutional investor holdings?</span></h3><div class="ace-line ace-line old-record-id-ENnMdLAE3ogjaSxMfJruPHMFsUe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-SZild3DxAoAlSTxmzfbuQqpNs5d"><span style="font-size: 16px;">Professional financial data platforms and analyst rating tracking tools provide access to institutional holding information, allowing investors to track portfolio changes by major funds and well-known investors.</span></div><div class="ace-line ace-line old-record-id-FsehdG0s4oO7IXx5k2VuvLYgs7b"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-XhYPd5P37oUMUrx2kZiuVWw6smh"><span style="font-size: 16px;">8.5 How can I access historical US stock price data?</span></h3><div class="ace-line ace-line old-record-id-DvrFdsBuYoY512xseHSuYgJjs1d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NseYda3eJo3UTlxXunRuf6w8s1g"><span style="font-size: 16px;">Yahoo Finance and comprehensive financial information portals both support historical stock price queries, and some platforms also offer downloadable datasets for backtesting analysis.</span></div><div class="ace-line ace-line old-record-id-DIIId0pOxoOKxSxkz2zuAgyisme"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-F4JedT8U6oUQaqxpPhLu81qRsTb"><span style="font-size: 16px;">Recommended Reading:</span></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-HzRLdSlMZoDCMrxyyBNufgB5sHf" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-TYxPdIHfPoDtTAxyYBwuwbVlslm" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-STbZddTQ5oIYNlxcfEAulbMRsJc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/key-economic-events-impacting-the-us-stock-market-370641117706798080" data-lark-is-custom="true" style="font-size: 16px;">Key Economic Events Impacting the US Stock Market</a></div></li><li class="ace-line ace-line old-record-id-GMkIdxCHCo70mHxJzEXuoyiNsHf" data-list="bullet"><div><span style="font-size: 16px;"><a href="https://www.mexc.com/support/article/us-stock-dividends-explained-375160462684321792">Understanding US Stock Dividends: Ex-Dividend Dates, Payment Dates, and the Full Process</a></span></div></li><li class="ace-line ace-line old-record-id-EoEvdKZnboCLZXxU2nGuPs19sUe" data-list="bullet"><div><a href="https://www.mexc.com/support/article/what-events-and-dates-to-note-when-buying-us-stocks-a-complete-guide-to-shareholders-meetings-dividends-and-ex-dividend-dates-370876112547430400" data-lark-is-custom="true" style="font-size: 16px;">What Events and Dates to Note When Buying US Stocks? A Complete Guide to Shareholders' Meetings, Dividends and Ex-Dividend Dates</a></div></li></ul><div class="ace-line ace-line old-record-id-Al3HdD4QGoqQmaxKsvpuaacxseh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-FAhAdUIqyoWYy6xz7nauOm3cssf"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-HXBHd0PZXofG3txBSixuoykUsOe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JKlkdewC7ooerixIEaPuBB1lsCd"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-UDASdSSJpoJU2QxQUNqux3DKslb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YS25d1t0toXiEtxczhcumLSIsud"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div></div>
What Events and Dates to Note When Buying US Stocks? A Complete Guide to Shareholders' Meetings, Dividends and Ex-Dividend Dates
<div data-page-id="HqPfdxDZ7onSvJxrBQHuaQ8vshf" data-lark-html-role="root" data-docx-has-block-data="false"><h2 class="heading-2 ace-line old-record-id-WYKhdZV31oxo5BxxjckuctLksMb"><strong>Key Takeaways:</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-GJbldzlqJofG1DxNPv7ubTYoste" data-list="bullet"><div><span style="font-size: 16px;">US stock investment requires attention to key events and dates such as shareholders' meetings, ex-dividend dates, and earnings seasons.</span></div></li><li class="ace-line ace-line old-record-id-YPG8do6R5owLXoxzZS8uZ4Tqsjd" data-list="bullet"><div><span style="font-size: 16px;">Investors must purchase shares at least one trading day before the ex-dividend date to be eligible for dividend payouts.</span></div></li><li class="ace-line ace-line old-record-id-UUFCdXVpVoqusFxdQMfuelUqsIh" data-list="bullet"><div><span style="font-size: 16px;">Stock prices tend to experience high volatility around earnings releases, requiring cautious operation.</span></div></li><li class="ace-line ace-line old-record-id-RzVdd7jMwoqLeqxEemzuaYqAsSf" data-list="bullet"><div><span style="font-size: 16px;">Fed interest rate meetings and the release of economic data will influence overall market trends.</span></div></li><li class="ace-line ace-line old-record-id-NuAmd6ZXxoX4KCxNZtLu7LGKscg" data-list="bullet"><div><span style="font-size: 16px;">Understanding optimal trading sessions helps identify favorable trading windows.</span></div></li></ul><div class="ace-line ace-line old-record-id-RKPcdy1Ono3OMqx2U5juk5pvs0e"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-D5vIdO4yBobKSrxUiwUu1GHHsRf"><strong>1. What is a Shareholders' Meeting? Why Should Investors Care?</strong></h2><div class="ace-line ace-line old-record-id-Tcg4dcsuFocAwExAXYYuD449sgf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-H1IOdkPs8o2WlYxC8WvuQFnasTs"><span style="font-size: 16px;">The shareholders' meeting is the highest decision-making body of a listed company, composed of all shareholders, and is responsible for making decisions on major corporate matters. As a US stock investor, understanding how shareholders' meetings work helps in better exercising shareholder rights and staying informed about the company's development.</span></div><div class="ace-line ace-line old-record-id-O8MndJRBPoqtGVxIPHPuSYpEsvz"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-OA6jdN49KoO9iKxhcCQuyq54s0b"><span style="font-size: 16px;">1.1 Main Types of Shareholders' Meetings</span></h3><div class="ace-line ace-line old-record-id-ZOiFdaGwaoCUzLxCnQXuNV14sAd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ETiTdAVPgoZwcaxl88JuvssRspe"><span style="font-size: 16px;"><strong>The Annual General Meeting</strong> (AGM) is the most common form, typically held within six months after the end of each fiscal year. The meeting's agenda includes approving annual financial statements, electing members of the board of directors, announcing dividend distribution plans, and discussing major strategic decisions of the company.</span></div><div class="ace-line ace-line old-record-id-JTNudbbjhob472xDBQCusdLZs0g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JmrxdbGRNoSbf6xgznzuXcSqs4g"><span style="font-size: 16px;"><strong>Extraordinary General Meetings</strong> (EGM), on the other hand, are convened when urgent matters involving the interests of the company and its shareholders arise, such as major merger and acquisition transactions or amendments to the articles of association that require a shareholder vote.</span></div><div class="ace-line ace-line old-record-id-ArdEdJsY9o6XlixwgeWu5lI8sbf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-WkwadsAGIoC7ZQxC8v9u9VqXsmd"><span style="font-size: 16px;">1.2 Core Topics Discussed at Shareholders' Meetings</span></h3><div class="ace-line ace-line old-record-id-UElpdLpNwo2Yd4x33fcueb8ysNc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NkLIdu4EEodVTxxXrPhutRwasqb"><span style="font-size: 16px;">At a shareholders' meeting, investors can review management's assessment on the past year's business performance, as well as plans for future development strategies. Primary topics usually cover the election and replacement of board members, approval of executive compensation packages, appointment of external auditing firms, and stock buyback or split plans.</span></div><div class="ace-line ace-line old-record-id-W31ydnGG4o6BNxxKnA0uvc46swh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Hw9hdB5IMoAbHpxrNUvuL2Y7s8c"><span style="font-size: 16px;">Through trading platforms, investors can easily track shareholders' meeting announcements for the US stocks they hold, staying updated on voting and meeting schedules.</span></div><div class="ace-line ace-line old-record-id-McMWdTrWKor9Fuxr3HKuxfZIsEb"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-QVj6dx9s3oW8QVxOrE1uxH60sOb"><strong>2. The Importance of Ex-Dividend Dates and Trading Strategies</strong></h2><div class="ace-line ace-line old-record-id-FF3RdcIvKop8IdxunUUubNvcs5d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PDHAdzPvhoVUOXxYf7yuybyHsSg"><span style="font-size: 16px;">The ex-dividend date is the most critical time in dividend investing. You must hold the stock before the ex-dividend date to be eligible for the upcoming dividend payout.</span></div><div class="ace-line ace-line old-record-id-YTzndEDXWoxLXax2KBUuKeoFsQh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-A1LAdNBWqoquZPxSwTbuPFCcs6e"><span style="font-size: 16px;">2.1 How the Ex-Dividend Date Affects Stock Prices</span></h3><div class="ace-line ace-line old-record-id-Hp8Pd1bOIozagdxy25juJFFEsrh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-ZicfdZfxuoJ4VTxnIh1uy57xsYC"><span style="font-size: 16px;">On the ex-dividend date, the stock price typically drops by an amount roughly equal to the dividend payout. This occurs because investors who purchase shares on or after this date are no longer entitled to the upcoming dividend, leading to a corresponding reduction in the stock's intrinsic value.</span></div><div class="ace-line ace-line old-record-id-RicRdbftpol4ibxgZXHughwUsDe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Xg9fdaQzDo6636xKo9QuJjKjsye"><span style="font-size: 16px;">According to the US stock T+1 settlement rule, investors must purchase the stock at least one trading day before the ex-dividend date to be recorded as a shareholder eligible for the dividend.</span></div><div class="ace-line ace-line old-record-id-IzYCda70foNUJZxXVxmuWg5Xs2b"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-IrGidI1xmofd1KxS0XsuEV9esyJ"><span style="font-size: 16px;">2.2 Considerations for Investment on Ex-Dividend Dates</span></h3><div class="ace-line ace-line old-record-id-Wru4dzhMgoLGyjxmrJtugatrsnc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HIm1dhw13oyTu8xIQgfuHfaeslc"><span style="font-size: 16px;">If your goal is to earn dividend income, ensure that you complete your purchase before the ex-dividend date. However, it is important to note that, because the stock price adjusts accordingly on the ex-dividend date, buying a day prior solely for the dividend may result in actual returns that are lower than expected after accounting for the price drop.</span></div><div class="ace-line ace-line old-record-id-RRCWdcIGIo8ayqxvfRBut5A8sbe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HWyddgxZJobUVfxc0OmukjQOsMA"><span style="font-size: 16px;">Holding high-quality dividend stocks long-term to accumulate returns through the power of compounding is often a more robust strategy than frequently chasing ex-dividend dates. The MEXC platform provides comprehensive US stock market services to help investors track critical dividend date information.</span></div><div class="ace-line ace-line old-record-id-ZkGsdE0rLoxvpOxRcsmuZIVmsrh"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-SXwqdikU3opeXwxMHRcuZx2As1g"><span style="font-size: 16px;">*BTN- <strong>Trade Stocks</strong>&BTNURL=<span style="color:rgb(100,37,208)"><u><a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a></u></span>*</span></div><div class="ace-line ace-line old-record-id-QeBYdhkFgoEX6MxTCtqu5l2MsMh"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-KxTwd0vUHoaeMOxuCmvu4ctDsyd"><strong>3. Earnings Season: The Period of Highest Volatility</strong></h2><div class="ace-line ace-line old-record-id-CIUTdIWDMoX5qqx0mvsuGh8nsPf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JQFJdOObsoMTuPxwcg1uiBxJsle"><span style="font-size: 16px;">US-listed companies release quarterly earnings reports four times a year, which is one of the most significant factors influencing short-term stock price movements.</span></div><div class="ace-line ace-line old-record-id-LT6Hd88HsoKWxFxQ1s6urNHJsDj"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TpIGdQ3hCowrLjxWy5euW6BYsJh"><span style="font-size: 16px;">3.1 Market Impact of Earnings Releases</span></h3><div class="ace-line ace-line old-record-id-Wec9dVK4Eosm9xxmwAWuAH8fsvd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-P6w2d4KJEocQYLxggq4u655lsid"><span style="font-size: 16px;">When a company's actual performance exceeds market expectations, it often drives a significant surge in the stock price; conversely, if performance falls short of expectations, the stock price may see a sharp decline. For some popular tech stocks, single-day moves can exceed 10% following an earnings release.</span></div><div class="ace-line ace-line old-record-id-VW6odgQ61oYaIdxTK6cuPFzEstg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-RwHqdO4e7o4WUEx2C7VuJgHMsDd"><span style="font-size: 16px;">Investors should closely monitor the earnings release dates of the stocks they hold and assess their risk tolerance in advance to decide whether to adjust their positions before the announcement.</span></div><div class="ace-line ace-line old-record-id-BvsUdxMtvoDTokxxn7wuHhslsCc"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-MVvAdJIRMoQOyoxuUY3uXsC9stc"><strong>4. The Significance of Stock Split and Buyback Announcements</strong></h2><div class="ace-line ace-line old-record-id-KpWqdFNnUoEsVkxHFZQueXmFsjh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-XloOdPoT6otwk4xziFmuR1NTsnh"><span style="font-size: 16px;">4.1 Stock Split Signals</span></h3><div class="ace-line ace-line old-record-id-PsZtdjt6loQ3mYxHtPeu5BdQsZh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AmEJdoK7EorPnXxqPydueDD6sjd"><span style="font-size: 16px;">When a company announces a stock split, it typically signals management confidence in the company's future prospects. By lowering the price per share after the split, it helps attract more small and medium-sized investors, which may support positive market sentiments.</span></div><div class="ace-line ace-line old-record-id-RNYadU0Vao0OJWxHVqBua7wKsNe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JEgydgH9wobfwBxbLzLuBJwcsib"><span style="font-size: 16px;">4.2 The Meaning of Stock Buybacks</span></h3><div class="ace-line ace-line old-record-id-XD1Kd2mpEoJvDqxeTxMutXHQs4f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JPaNdOGpwoR1jpxAGAru64z4sdh"><span style="font-size: 16px;">A company repurchasing its own shares is generally viewed as a signal that management believes the current stock price is undervalued. Buybacks reduce the number of shares outside the market, which helps boost earnings per share and support the stock price.</span></div><div class="ace-line ace-line old-record-id-FRwHdRS8EoIGcBxPDrXuZoCns3g"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-PHiNd9fGTosmSUxWEa7uMhtOssh"><strong>5. Trading Opportunities and Risks Brought by M&A Announcements</strong></h2><div class="ace-line ace-line old-record-id-EcQHd7NUvoqwTSxivRnut1HLsQc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-StZDdsPcHotBHcx1VdBua8ZXsZf"><span style="font-size: 16px;">Mergers and acquisitions news is a major factor that can lead to sharp price movements. The stock price of the target company typically surges significantly, while the reaction of the acquiring company's stock price varies depending on the terms of the deal.</span></div><div class="ace-line ace-line old-record-id-Tn56dyS7MoEWufxPH12u3blLsig"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WwtIdORYgogu0cxwstyu8UM0s6d"><span style="font-size: 16px;">Investors must remain vigilant regarding the risks of speculative trading based on M&A rumors. Since M&A transactions face the possibility of failure, once a deal falls through, the prices of the involved stocks often fall sharply.</span></div><div class="ace-line ace-line old-record-id-KP3ydU5byoRqyGxMf4GuGVSas5c"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ZiFpdGQdgo33cjxHXVPuJv23s4d"><strong>6. The Impact of Macroeconomic Events on US Stocks</strong></h2><div class="ace-line ace-line old-record-id-T2gzdaXXIogJCpxB1xXuzKTvs5b"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DBQvdkGsCovI8PxEYk4u4mn5sOb"><span style="font-size: 16px;">6.1 Fed Interest Rate Meetings</span></h3><div class="ace-line ace-line old-record-id-Lm7fdhMKNoUDAYxLWz2uEWeZssf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TtDMdIG6noeF0axMB3HuVoipsMr"><span style="font-size: 16px;">The Fed holds eight Federal Open Market Committee (FOMC) meetings annually to determine the direction of the federal funds rate. Interest rate hikes typically put pressure on the stock market, while expectations of rate cuts can support the equity markets.</span></div><div class="ace-line ace-line old-record-id-I88ididNUoD9VfxDTsMu0hoMsU6"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-S6WAdFeuPoP9qQxn5KmuWFHMsah"><span style="font-size: 16px;">6.2 Release of Important Economic Data</span></h3><div class="ace-line ace-line old-record-id-K6Osd94x3otQyhxkkTcuDGxTsMf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-U5QqdgLElowi5uxv2bpuZgvPsZc"><span style="font-size: 16px;">The release of economic indicators such as the Consumer Price Index (CPI), Producer Price Index (PPI), and Non-Farm Payrolls significantly impacts market sentiment. Investors can track economic data releases and market analysis through the information features on MEXC.</span></div><div class="ace-line ace-line old-record-id-OveodXhHpotFr8xcogLuaUqHs8e"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-WnKQdRJrzoEeb4x4gGeuBxCCsYc"><strong>7. FAQ</strong></h2><div class="ace-line ace-line old-record-id-WAKUdDk7HoncpIxSgOvuWwbBsCd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-E0CLdOK9UodArjxA7kfu64h8s8b"><span style="font-size: 16px;">7.1 What is the purpose of a shareholders' meeting?</span></h3><div class="ace-line ace-line old-record-id-OclJd5dLXoB7pxxMoGnu1Pm6sPg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Rwemd8Tskop8xJxYHMku90PhsPC"><span style="font-size: 16px;">The primary purpose of a shareholders' meeting is to allow shareholders to exercise their voting rights on major corporate matters, including electing board members, approving financial statements, and deciding on dividend distribution plans. It is the core mechanism of corporate governance.</span></div><div class="ace-line ace-line old-record-id-EklEdv0yOoj37Yx9zqLue0Khspd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Q5oFde3KrohxhVxj3O3u42Nesbh"><span style="font-size: 16px;">7.2 Can retail investors attend shareholders' meetings?</span></h3><div class="ace-line ace-line old-record-id-UjGmdpRBNoC9pVxPQfkuifNjsMe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EfnBdX9JFomc9exTzcSuEvjMsWe"><span style="font-size: 16px;">Yes, as long as you hold shares in the company, you have the right to attend the shareholders' meeting. Even if you cannot attend in person, you can exercise your rights through proxy voting.</span></div><div class="ace-line ace-line old-record-id-O4n0d1U3bojoytxmQG8uqvNUsIh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-H60FdQD19odiDrxL1fLucZ6ushQ"><span style="font-size: 16px;">7.3 Should I buy stocks before or after the ex-dividend date?</span></h3><div class="ace-line ace-line old-record-id-QgwLdrPUjohmboxytzzuGkD7suc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Bkq5dJ1tboiA74xhBzFuxbIas7f"><span style="font-size: 16px;">If you wish to receive the upcoming dividend, you must buy before the ex-dividend date. However, you should consider the stock price adjustment on the ex-dividend date and evaluate the overall investment return.</span></div><div class="ace-line ace-line old-record-id-XFp5dZbbcobRFxxjwdUuzIC8sWe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-PNjrdoSLmo4rvtxZLoAul39WsVf"><span style="font-size: 16px;">7.4 Can I still receive the dividend if I sell the stock on the ex-dividend date?</span></h3><div class="ace-line ace-line old-record-id-VvUadhJNFoKyUDxW1F3uswdTs2b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-PGYSdj1t4oQIisxIQvJu7WPMskd"><span style="font-size: 16px;">Yes. As long as you held the stock before the ex-dividend date, you remain eligible to receive the dividend even if you sell the shares on the ex-dividend date itself.</span></div><div class="ace-line ace-line old-record-id-AI6odRSIJoPflAx2PLiuK0Yys3g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UdiidE6hyopgLQxoyD2urLPXscb"><span style="font-size: 16px;">7.5 What is the most important factor to consider when buying a stock?</span></h3><div class="ace-line ace-line old-record-id-QXD9dtdo4oLDiPxFPYbux9YysGe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NRPod3R19oyYdvxcAROukRbOshA"><span style="font-size: 16px;">You should comprehensively evaluate the company's fundamentals, valuation levels, industry prospects, and financial health, as well as your own risk tolerance and investment horizon.</span></div><div class="ace-line ace-line old-record-id-G0xpdJfPJozo66x2tGCuF7Nbs6g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-CYZ4dWiKboLEckx6cTJufSGcso1"><span style="font-size: 16px;">7.6 What is the best time of day to buy stocks?</span></h3><div class="ace-line ace-line old-record-id-P67jdOnvyoSBP4xv6QZuO3vQsld"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UE1Yd5I26osFk2xpn7BuH1QOsGe"><span style="font-size: 16px;">Trading is most active during the first hour after the opening and the last hour before the closing, though volatility is also at its peak. For long-term investors, the exact timing of entry is usually less important.</span></div><div class="ace-line ace-line old-record-id-CPT5dYeCIotgiVxTpTBuAzz6sbe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-O67ldnvrVoMBDyxsVY6utxLNsue"><span style="font-size: 16px;">7.7 What is the 7% rule in the stock market?</span></h3><div class="ace-line ace-line old-record-id-RIvJd0NwYoZRNPxV9mUuEVftsYb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BVgrdlx39oVLhtxcKjtu5UGgsVg"><span style="font-size: 16px;">This is a risk management strategy where an investor sells a stock to cut losses when the price drops 7% - 8% from the purchase price, aiming to control the magnitude of loss on a single trade.</span></div><div class="ace-line ace-line old-record-id-AfFqdDVKvonOfhxiJDduVJmTsdf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VxHedlEkHo51P3x4IKyuteWysNf"><strong style="font-size: 16px;">Recommended Readings:</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-EfxVd55Uto62H1xOrCtuzB1esab" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-TeGWdjVsmoVAGJx4XqfuUMidsud" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-Hl6YdWMXEoRukLxS1uauOCeLskh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/key-economic-events-impacting-the-us-stock-market-370641117706798080" data-lark-is-custom="true" style="font-size: 16px;">Key Economic Events Impacting the US Stock Market</a></div></li><li class="ace-line ace-line old-record-id-VeoTd5qkeoOsK1xxfyEurgS9sPc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-dividends-explained-375160462684321792" data-lark-is-custom="true" style="font-size: 16px;">US Stock Dividend Distribution: Understand Ex-Dividend and Payment Dates at a Glance</a></div></li><li class="ace-line ace-line old-record-id-F8PzdMHZYoN8mdxvAVqum2rBsVd" data-list="bullet"><div><a href="https://www.mexc.com/support/article/free-us-stock-analysis-tools-373856828440805376" data-lark-is-custom="true" style="font-size: 16px;">US Stock Analysis Tools: A Complete Guide to Free Websites for Beginners</a></div></li></ul><div class="ace-line ace-line old-record-id-MDm6dbf0xo3Xp8xewXluYDq1s4F"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Ag7Id7tBCoUMNCx6kVuurK8AsUd"><span style="font-size: 16px;"><strong>Disclaimer: </strong>The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-NDIvdJxy4oVPjqxnuXRunTgRsMd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DZCOdolTxoCwbYxi7Yqu39W9sDH"><span style="font-size: 16px;">By participating in these investment activities you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div><div class="ace-line ace-line old-record-id-YehddSHgiokr4ixcmE6umyJqsOb"><span style="font-size: 16px;"><br></span></div></div>
A Guide to the Three Major US Stock Exchanges and Indexes
<div data-page-id="DS1rdNZjFoczMGxCTWUuOKXMso8" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-W7bOdH1FOoRbt6xGmZsuJPxYsTe"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-NfuvdVHJ3oenUrxw9oxuB4iEscz" data-list="bullet"><div><span style="font-size: 16px;">The US stock market is built around three major exchanges: the NYSE, Nasdaq, and AMEX.</span></div></li><li class="ace-line ace-line old-record-id-AvWIdbzzlo9ZOvxN5PYuQzvusOh" data-list="bullet"><div><span style="font-size: 16px;">The NYSE is known for blue-chip stocks, Nasdaq is heavily focused on technology stocks, and AMEX primarily serves small and mid-sized companies.</span></div></li><li class="ace-line ace-line old-record-id-TffidAYL3o5XAWxlT3UuKSAtsS3" data-list="bullet"><div><span style="font-size: 16px;">The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Index reflect the US stock market from different angles.</span></div></li><li class="ace-line ace-line old-record-id-V2s2dWx3Tog1QrxkhX4u2GjOsrc" data-list="bullet"><div><span style="font-size: 16px;">The S&P 500 is the most representative, the Dow is the most widely recognized, and the Nasdaq is typically the most volatile.</span></div></li></ul><div class="ace-line ace-line old-record-id-ZlTHdjszwozNY4xzsadu1yaysBe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-F9DVdBRBWoVaAFxbYaruKfrSszf"><span style="font-size: 16px;">Through its partner licensed broker, <a data-lark-is-custom="true" href="https://www.mexc.com/">MEXC</a> offers global users access to real shares of publicly listed US companies. Users can directly buy and hold stock assets, benefit from stock price movements, and enjoy the rights associated with real share ownership. In this article, we will use the three major US stock exchanges and the three major market indexes to help you build a foundational understanding of US stock investing.</span></div><div class="ace-line ace-line old-record-id-U7t4dPwp9ogc5bxNXzDuCb4vsm7"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-UkPfdcssso21LvxdqKOuZWs6sFb"><span style="font-size: 16px;">*BTN-<strong>Trade Stocks</strong>&BTNURL=<a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a>*</span></div><div class="ace-line ace-line old-record-id-J2fSdvIV8ok5NTxKJGEuIR0Ks5f"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-IzXkd6ODdov8OJxilLVuyFxCskb"><strong>1. The Three Major US Stock Exchanges Explained</strong></h2><div class="ace-line ace-line old-record-id-Cx2TdaJM2ooFtKxyOTsuCQSUsIg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Kj4ddy2znoeleDxyfjjufKYMsMm"><span style="font-size: 16px;">The US stock market is the world's largest capital market and is centered around three core stock exchanges. Understanding the characteristics of each exchange is the first step in learning how to invest in US stocks.</span></div><div class="ace-line ace-line old-record-id-EiTGdxIMVoueOHx2Gh4uhlUesRc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-LqiBd2h0poZCdQxLJysuotmMs83"><span style="font-size: 16px;">1.1 New York Stock Exchange (NYSE)</span></h3><div class="ace-line ace-line old-record-id-Jp5wdtGoIoIKFAxrGv8u14pcsPc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KmHudQh7fonUPBxh3F6uTl1hstd"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://www.nyse.com/index">The New York Stock Exchange</a>, or NYSE, has a history of more than 200 years and is the largest and oldest stock exchange in the US market. <a data-lark-is-custom="true" href="https://www.nyse.com/index">The NYSE</a> has strict listing requirements and generally expects companies to demonstrate stable profitability. As a result, it is home to around 3,500 long-established, large-scale blue-chip companies.</span></div><div class="ace-line ace-line old-record-id-RJPQdmzhTogDBfx8NizuNYq3sle"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QxTUdA7I1oWcbLxAqGduYoqwszk"><span style="font-size: 16px;"><strong>Representative companies:</strong> <a data-lark-is-custom="true" href="https://www.coca-colacompany.com/">Coca-Cola</a>, <a data-lark-is-custom="true" href="https://www.jpmorgan.com/global">JPMorgan Chase</a>, Boeing, Walmart, and Disney, along with many other Fortune 500 companies, are listed on the NYSE. These companies are generally financially stable and known for relatively consistent dividends, making them a common choice for investors seeking steadier returns.</span></div><div class="ace-line ace-line old-record-id-XJ0Jdz5utoAUeHxPZlZupBgmseb"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BOyBdWqo3okfuDxZxn0uKoKYspf"><span style="font-size: 16px;">1.2 Nasdaq Stock Market (NASDAQ)</span></h3><div class="ace-line ace-line old-record-id-Bzf5dGXCCoEoLVxRuMZujewas8c"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YsohdmHHWotZIux8hLvuME2psX7"><span style="font-size: 16px;">Founded in 1971, <a data-lark-is-custom="true" href="https://www.nasdaq.com/">Nasdaq</a> is the world's second-largest stock exchange and has the largest number of listed companies as well as one of the highest trading volumes. Unlike the NYSE, <a data-lark-is-custom="true" href="https://www.nasdaq.com/">Nasdaq</a> operates as a fully electronic exchange, with relatively more flexible listing requirements that make it particularly suitable for high-growth technology companies.</span></div><div class="ace-line ace-line old-record-id-NwRGd2O9EoigGnxaLnxuhLU6sdh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-IKlfdEdT1oInPBxqo9lujtsmsVd"><span style="font-size: 16px;"><strong>Representative companies:</strong> <a data-lark-is-custom="true" href="https://www.apple.com/">Apple</a>, Microsoft, Google, Amazon, Meta, and <a data-lark-is-custom="true" href="https://www.tesla.com/">Tesla</a> are all listed on Nasdaq. More than 60% of Nasdaq-listed companies are in the technology sector, making it a key barometer for the global tech industry.</span></div><div class="ace-line ace-line old-record-id-SdvudBKp3oFLBbxsw8Zu3a3EsEg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-L6X1devKookvIRxWlFlu385esGe"><span style="font-size: 16px;">1.3 American Stock Exchange (AMEX)</span></h3><div class="ace-line ace-line old-record-id-U8zcd7iMjoCaDFxolvQuCliFscd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NnYkdUqVzoPLlAxLL1pueu4Xslf"><span style="font-size: 16px;">The American Stock Exchange was once the third-largest exchange in the United States. It was later acquired by the NYSE and renamed <a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/NYSE_American">NYSE American</a>. This exchange primarily serves small and mid-sized businesses and has relatively lower listing requirements, making it a stepping stone for many companies seeking to grow into larger markets.</span></div><div class="ace-line ace-line old-record-id-Nx4AdKSPSoXKsqxCUyLuqeVAsmd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-VOm0d4UQHolkQRxahNyu5BHYsZd"><strong>2. Key Differences Between the Three Major US Stock Exchanges</strong></h2><div class="ace-line ace-line old-record-id-RLZ2dz5O9oQVD2xaTafu6NyOsGg"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="236;204;182;162" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="236"><col width="204"><col width="182"><col width="162"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-MHnzdYxKkoTfzqx4edcuPzTBs8e"><strong style="font-size: 16px;">Comparison Area</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-JXktdd1Yloca8WxakwNudaEgsEg"><strong style="font-size: 16px;">NYSE</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UkBUdqHccoBoMfxyKI3u8Nb6swc"><strong style="font-size: 16px;">Nasdaq</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UX7hdLZWgogzSCxanhyuPiJnszh"><strong style="font-size: 16px;">AMEX</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Wkupd7D5sopL5MxoZzZuFEKss5g"><span style="font-size: 16px;">Listing requirements</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Yu7VdrtLDoBup2xjPTiuUJMcsyg"><span style="font-size: 16px;">Strict, with an emphasis on sustained profitability</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Sp8xd2rOKoWpyyxj8dDuhB94sEL"><span style="font-size: 16px;">Relatively flexible</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-CBLtdzx8yo1Ounx6dF5uXB67syh"><span style="font-size: 16px;">Lower</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-GBQxdLClzoQOnbx1D1yuWjrEsHP"><span style="font-size: 16px;">Typical company profile</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-T8TvdBFH5onMxqxkZbuu17yqseb"><span style="font-size: 16px;">Large blue-chip companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-FJbXdBDkIoSEjIxAdJWuPoKcs0f"><span style="font-size: 16px;">Technology and innovation-driven companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-AGwtdfpnioRmn3xt3VZuxYzVsTd"><span style="font-size: 16px;">Small and mid-sized companies</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-YcJid2GEfoXHMHxW1vWugjlEskf"><span style="font-size: 16px;">Trading model</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-VSlndsp5hoabRdxEpjjuahjjsig"><span style="font-size: 16px;">Hybrid of floor and electronic trading</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Q5sfduKC7oYIE8xTgfIuuEAXsRm"><span style="font-size: 16px;">Fully electronic</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-I7q0dsDrYoHw11xNTHQuP5IJsPe"><span style="font-size: 16px;">Electronic</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-J78tdtxUUowQnFxdvqmuJNH3sHb"><span style="font-size: 16px;">Representative companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-G52bdLNwnog2ZUx7vL2u0TXhsTh"><span style="font-size: 16px;">Coca-Cola, JPMorgan Chase</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-GWa3dpcAsovD6hxoNYLurQuusoe"><span style="font-size: 16px;">Apple, Microsoft</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Q6bdd4O68obY6hxplGyuz40Is5e"><span style="font-size: 16px;">Smaller growth companies</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-A3prdBaR1osO83xRgEEuzaRxsfe"><span style="font-size: 16px;">Investment characteristics</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-KNG2dpkqsofVzvxUwJNu069ysPe"><span style="font-size: 16px;">More stable, with relatively consistent dividends</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ICeMd4ynBo3NMdxKpcNu8PvDstc"><span style="font-size: 16px;">Higher growth, higher volatility</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-F4wwd5ENDoYBCFxngwcuZIV5sxc"><span style="font-size: 16px;">Early-stage growth potential</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-AEuLdgi82oVe2YxBHqzu8r1Dsab"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-UB6VdrdkfoWnMrxOgymuNqJxsaf"><strong>3. The Three Major US Stock Indexes Explained</strong></h2><div class="ace-line ace-line old-record-id-XzUhdHvQqo6RFDxs0zBuzHZ4spV"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KjbSd8W0voPm3Mx0YE8u5VFasxf"><span style="font-size: 16px;">US stock indexes are important tools for measuring overall market performance. Each of the three major indexes has a different focus and helps investors understand the market from a different perspective.</span></div><div class="ace-line ace-line old-record-id-XIdJdstYkoOdXWxCCKfuf9wgscg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-TKEWdP9t7otGh2xAXf4u6yjfsnh"><span style="font-size: 16px;">3.1 Dow Jones Industrial Average (DJIA)</span></h3><div class="ace-line ace-line old-record-id-EJshdu6Q4oFHPYxIO8uuB3p8sFc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WNiPdT9CzoAdQOxwp59ue2mXspb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average">The Dow Jones Industrial Average</a> was created in 1896 and is the oldest major US stock index. It consists of 30 highly influential blue-chip companies across sectors such as technology, finance, healthcare, and consumer goods, including well-known names like Apple, Microsoft, JPMorgan Chase, Coca-Cola, and Nike.</span></div><div class="ace-line ace-line old-record-id-OtdrdaoNdog2GbxYrbOufBxYsxd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TzpIdsh1Yof9exxen0Ku0ahZseb"><span style="font-size: 16px;"><strong>Key features:</strong> The Dow is price-weighted, meaning companies with higher share prices have a greater impact on the index. It is also the index most frequently cited by the media and is often seen as a barometer of the overall health of the US economy.</span></div><div class="ace-line ace-line old-record-id-GATgd5DJooS3TWx4iXxuF6BHsWf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-N6Czd3JyKoGtAaxWC9euogZFsGb"><span style="font-size: 16px;">3.2 S&P 500 Index</span></h3><div class="ace-line ace-line old-record-id-NPr7dJpBQoBO01xNQBYu2kOcsZc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DQOcdMBn1oGTX2xkZncuIxolsPb"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/S%26P_500">The S&P 500</a> was launched in 1957 and includes 500 leading publicly listed US companies. It accounts for about 80% of the total market capitalization of the US stock market and is widely considered the most representative broad-market index for US equities.</span></div><div class="ace-line ace-line old-record-id-GJnNdOi6jor94ZxEnTluB2OesNg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JuVedcf5FoNN4yx9bH6uxJGFsDg"><span style="font-size: 16px;"><strong>Key features:</strong> The S&P 500 uses market-cap weighting, which provides a more accurate reflection of the market's actual structure. It is used by 97% of institutional investors as a performance benchmark, and its movements are widely seen as a reflection of both the US economy and corporate earnings. Information technology has the largest sector weighting at around 30%, followed by healthcare, financials, and other sectors.</span></div><div class="ace-line ace-line old-record-id-EB8ddHujToTbGvx8yViuiifLsAd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Toxgd8lytocDVkxkhBvusM8Pslf"><span style="font-size: 16px;"><strong>Top-weighted companies:</strong> Apple, Microsoft, Amazon, Nvidia, and Google rank among the largest constituents in the index.</span></div><div class="ace-line ace-line old-record-id-GFwfdFZqxoZhxFxvc88u77Ngs7d"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-S3nsdoT0Ko7QQRx0Q23unKUSsrc"><span style="font-size: 16px;">3.3 Nasdaq Composite Index (NASDAQ)</span></h3><div class="ace-line ace-line old-record-id-MClQdBmgoob0DUxqIvCuGtPEsRb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Egx0dfo7xoDzvqxI3AxusWdQsFc"><span style="font-size: 16px;"><a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/Nasdaq_Composite">The Nasdaq Composite</a> tracks all stocks listed on the Nasdaq exchange and includes more than 3,000 constituents. Around 60% of these companies come from the technology sector, making it one of the most important indicators for tracking tech stock performance.</span></div><div class="ace-line ace-line old-record-id-H7SJdAPZcocWFJxiJxUu56y8sDb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-YYNHd0VAforixOxFZAwuUDX0soc"><span style="font-size: 16px;"><strong>Key features:</strong> The Nasdaq Composite is market-cap weighted, which gives major technology companies an outsized influence on the index. Companies such as Microsoft, Apple, Amazon, and Nvidia rank among its largest weights. Because of its heavy technology concentration, the Nasdaq Composite is generally more volatile than the Dow and the S&P 500, but it also offers greater exposure to growth potential.</span></div><div class="ace-line ace-line old-record-id-PAQhdL45hoa00cx0IZ4uAL1GsIL"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-TtLvdMkdqoGGUCx6ZM6udrSWsme"><strong>4. Key Differences Between the Three Major US Stock Indexes</strong></h2><div class="ace-line ace-line old-record-id-VDeKdqh5botWITxIvotuuOY1sjf"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="176;176;208;208" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="176"><col width="176"><col width="208"><col width="208"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-W0RZdd5ZKoJW5Txl2rJuqDXfsJf"><strong style="font-size: 16px;">Comparison Area</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UWkcdKbr7oKbgAxqw57uGWFCsYc"><strong style="font-size: 16px;">Dow Jones Industrial Average</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ASeVd8OEpo7Mq4xHo3VuXTSuscc"><strong style="font-size: 16px;">S&P 500</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-KoVpdJjqCosw0hx41dGuolW7sZg"><strong style="font-size: 16px;">Nasdaq Composite</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Bt9CduWZ4onsAixWXkHukhrHsnb"><span style="font-size: 16px;">Number of constituents</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-PX4Xd6F84oDS18xe7fgupdlss0b"><span style="font-size: 16px;">30 selected blue-chip stocks</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-BePGdMIsZoLEYOxbTYau9NCNs8b"><span style="font-size: 16px;">500 large companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Qx97d5PCiou5kDxy3vpurWqJsQd"><span style="font-size: 16px;">3,000+ stocks</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-KtKkdoo8CoTPpSxRBRwul0cYshb"><span style="font-size: 16px;">Calculation method</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-OvdJdGwrcotOhwxjUJNuGlBFspd"><span style="font-size: 16px;">Price-weighted</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-HGSMdkLMSodtsnxAPouu7BGNs2f"><span style="font-size: 16px;">Market-cap weighted</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-L2TddAdxYo2BVnxk440u7CQVsQg"><span style="font-size: 16px;">Market-cap weighted</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-TPsNdUz48odusjxuH9oucDTtszb"><span style="font-size: 16px;">Sector focus</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-DoRLdo3FYoafgtxyi72uy43esSe"><span style="font-size: 16px;">Broad sector balance</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ZRoidiCM8oYIruxdBd5unEZ3src"><span style="font-size: 16px;">About 30% technology</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-U5U1d18DMoHdFmxx8GDuSsKcsPp"><span style="font-size: 16px;">About 60% technology</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-SOzsdV7NZowAJTxPaQ6uoZi1sSf"><span style="font-size: 16px;">Volatility</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Cr2DdSPexoBhw4xjwhAukKresWd"><span style="font-size: 16px;">Lowest, with more stable constituents</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-GQMBd0mXnowZdgxMn6suFGwAsZc"><span style="font-size: 16px;">Moderate, with broader sector balance</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UnhTdNENvovwb0x5NMaux936sKc"><span style="font-size: 16px;">Highest, with greater tech sensitivity</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-EyTfdJWffo4lZCxhnz0u1zxOs3e"><span style="font-size: 16px;">Market representation</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-B8mMduiu7oZ2t1xAeDCuBBPRsYg"><span style="font-size: 16px;">Most widely recognized, but less comprehensive</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-DYMNdCfoFojtjaxamgSuZnJSsBb"><span style="font-size: 16px;">Covers about 80% of US market cap and is the most representative</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-QyTmdLETAook2ux5KZfu8Lncsif"><span style="font-size: 16px;">Reflects technology and innovation trends</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-AOKgdiFHLoZNOVxx7SZuR4cQsEg"><span style="font-size: 16px;">Representative companies</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-UVgLd95QMoizwhx3VNOuc8IZs8b"><span style="font-size: 16px;">Coca-Cola, Nike, JPMorgan Chase</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-FqRrdQ93joLtqbxWoE5ubNBQsrh"><span style="font-size: 16px;">Apple, Microsoft, Amazon</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-KJE4drbihoeKS6xuBsDuuJv5s5c"><span style="font-size: 16px;">Nvidia, Tesla, Meta</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-NvH3d7IiEoYsZ8xt6jgupUkSsqf"><span style="font-size: 16px;">Investment focus</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Nh76dAc7Ponag9x8zqBu5id8sJh"><span style="font-size: 16px;">Tracks leading blue-chip performance</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-VWZ0duwzVoLXksxHoMuu3I6Jsue"><span style="font-size: 16px;">Tracks the overall market</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: middle; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-EzeZdw8FyozKAzxeDTluUPiwsrh"><span style="font-size: 16px;">Tracks the technology sector</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-AmnddFc0uoQKhXx3eGou5nGysYr"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-MDRqdEn69o9WYpxGt6zuV71usAf"><strong>5. Frequently Asked Questions About US Stocks</strong></h2><div class="ace-line ace-line old-record-id-HgikdMxl8otP0hxLPlZuLkTCswg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SwHbdiHFnoXDL7x3xopumeNdsFd"><span style="font-size: 16px;">5.1 What is the US stock market?</span></h3><div class="ace-line ace-line old-record-id-Nh0Cdab9RogPrSxmCv8ut6ESsef"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-TuHjdCpv9otA2Vx0u3Vu1InWsNg"><span style="font-size: 16px;">The US stock market refers to the equity market in the United States. It is the world's largest and most mature capital market and is made up of three major exchanges: the NYSE, Nasdaq, and AMEX. Through MEXC's partner broker, global investors can participate in US stock investing more conveniently.</span></div><div class="ace-line ace-line old-record-id-IjNzdd9EhoHPgtx3pkNu5xWNswe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DOpndSlV4oqzOLxUi3XuIaHHsqb"><span style="font-size: 16px;">5.2 How can I invest in US stock indexes?</span></h3><div class="ace-line ace-line old-record-id-J5OIdMYHso8Wbzx8pWJufQMZs0f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-D6pwdgqSeoRyZ4x0UN5ub7yBsTn"><span style="font-size: 16px;">Although indexes themselves cannot be traded directly, retail investors typically gain exposure through index ETFs such as SPY and QQQ, or by purchasing constituent stocks directly. At the same time, investors can also access US stock-related trading products on MEXC to participate in the price movements of constituent stocks such as Apple and Microsoft.</span></div><div class="ace-line ace-line old-record-id-Hk49dHRDoosrilxRWIhuzssBsgf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-GgLDdF0smok0PmxB6YSuf6N4sIg"><span style="font-size: 16px;">5.3 Which is more important, the S&P 500 or the Dow?</span></h3><div class="ace-line ace-line old-record-id-BuyfdsD7No2DeQxhxNAumPSQsQc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AuVsdAfZAoQP9yxQP5euWXMusnd"><span style="font-size: 16px;">The S&P 500 is generally more useful as a market reference because it includes 500 companies and represents around 80% of US stock market capitalization. It provides a broader and more accurate picture of overall market performance and is also the benchmark most commonly used by institutional investors. The Dow is more widely recognized by the public, but because it includes only 30 stocks, it is less comprehensive.</span></div><div class="ace-line ace-line old-record-id-FGDWdCPA3oQ4pIxHKx2uZTjOsNc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ZPzkdmpIOoh7KHx71FpuwyDxs0X"><span style="font-size: 16px;">5.4 Why is the Nasdaq more volatile?</span></h3><div class="ace-line ace-line old-record-id-NUvEdIy1ZoDHQlxAF3juE8CJsme"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-WDsjd63rRoHqtwxG2EeuFG9isCf"><span style="font-size: 16px;">Around 60% of Nasdaq's constituents come from the technology sector, and tech stocks are generally more sensitive to changes in interest rates, market sentiment, and growth expectations. Many of these companies are high-growth businesses with less stable earnings, which can lead to larger swings in valuation. By comparison, the Dow and the S&P 500 include more traditional blue-chip companies and tend to show more stable performance.</span></div><div class="ace-line ace-line old-record-id-K8bedGXx5obvvFxBoRwuywPesVg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-BUcndB0VYo9NHhxp6s0uKlkCskg"><strong style="font-size: 16px;">Recommended reading:</strong></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-O5VMdW3Lao79g9xVv1duUyxEshf" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-CriQdTIyRo98Zlxv8h5uCHVQstc" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-OQ6Bd4I3xoRQ7VxQZGTu7fuVsph" data-list="bullet"><div><a href="https://www.mexc.com/support/article/understanding-the-basic-trading-rules-of-the-us-stock-market-353097164145019904" data-lark-is-custom="true" style="font-size: 16px;">Understanding the Basic Trading Rules of the US Stock Market </a></div></li><li class="ace-line ace-line old-record-id-Efk4d64yHo9F7ixR4waujyNgsue" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-market-trading-hours-and-holidays-357457114296227840" data-lark-is-custom="true" style="font-size: 16px;">US Stock Market Trading Hours and Holidays: A Time Zone Guide </a></div></li><li class="ace-line ace-line old-record-id-OBeldU03eoNRIqxr1wHuL63RsZb" data-list="bullet"><div><a href="https://www.mexc.com/support/article/a-guide-to-us-stock-overnight-trading-357458016239358976" data-lark-is-custom="true" style="font-size: 16px;">A Guide to US Stock Overnight Trading: Trading Hours, Rules, and Risk Analysis </a></div></li></ul><div class="ace-line ace-line old-record-id-VcgRdtqnloWYWrx97CwuEXsGsVe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-E9NUdj3VAoA41nxy4Y3uWCz3syb"><strong style="font-size: 16px;">Disclaimer:</strong></h3><div class="ace-line ace-line old-record-id-Denbdj9MDoCCl5xqRUpuDszdsHe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VIlad54gzof5FvxX8JVurLuUsIJ"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-HmpndImp7o2v5tx4zJDu7vUTslc"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EaofdIprAosZt4xNcCmuFzhgs5e"><span style="font-size: 16px;">By participating in these investment activities, you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div><div class="ace-line ace-line old-record-id-RqaFdXbVno9Or6xhPu1u9NNYsCg"><br></div></div><style><!--br {mso-data-placement:same-cell;}--> td {white-space:nowrap;border:0.5pt solid #dee0e3;font-size:10pt;font-style:normal;font-weight:normal;vertical-align:middle;word-break:normal;word-wrap:normal;}</style>
Understanding the Basic Trading Rules of the US Stock Market
<div data-page-id="IYQgdcvHeodPfnxRzz4uhI1nsGc" data-lark-html-role="root" data-docx-has-block-data="true"><h2 class="heading-2 ace-line old-record-id-PfGedNiHVoNaJGxewr6u1EHes5g"><strong>Key Takeaways</strong></h2><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-IkZkd6UQNohE2RxoPV4ul9IMsUe" data-list="bullet"><div><span style="font-size: 16px;">The US stock market follows a T+0 trading system, which means stocks bought today can be sold today. The minimum trading unit is 1 share, making trading flexible and convenient.</span></div></li><li class="ace-line ace-line old-record-id-YdWPdq8JYoqDWtxWOBduCURaseh" data-list="bullet"><div><span style="font-size: 16px;">There is no daily price limit in the US stock market, but a three-tier circuit breaker system is in place to pause trading during sharp market declines.</span></div></li><li class="ace-line ace-line old-record-id-PepSd5Mpao8wStx4WGjub9czstc" data-list="bullet"><div><span style="font-size: 16px;">Dividends received by non-US investors are generally subject to a 30% withholding tax, while capital gains from stock trading are usually not taxed by the US.</span></div></li><li class="ace-line ace-line old-record-id-I3eddeXNDo3kXmxqImKutCfosEp" data-list="bullet"><div><span style="font-size: 16px;">If your account equity is below $25,000, you should pay attention to day trading restrictions to avoid trading limitations.</span></div></li><li class="ace-line ace-line old-record-id-FI3MdeKesoD0bJxZEHnu2zORsDc" data-list="bullet"><div><span style="font-size: 16px;">Through its partner licensed broker, MEXC provides access to the US stock market. The stock assets are held in the user's name and belong to the user.</span></div></li></ul><div class="ace-line ace-line old-record-id-LaWtdBIeDoN6wkx32DDuzBQ7s0e"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EDBDdb3VDog9d8xoy2HutY7psye"><span style="font-size: 16px;">Through its partner licensed broker, MEXC offers global users access to trading in real shares of publicly listed US companies. Users can directly buy and hold stock assets, benefit from stock price movements, and enjoy shareholder rights. Before you begin investing in US stocks, it is important to understand the market's trading rules in full. Doing so can help you build a more complete investment framework and make more rational investment decisions.</span></div><div class="ace-line ace-line old-record-id-X1vgdBCuioOedkxByw0uxyBNsJg"><span style="font-size: 16px;"><br></span></div><div style="text-align:center" class="ace-line ace-line old-record-id-FE80d4JMioEBonxyaD6uqYWus3d"><span style="font-size: 16px;">*BTN-<strong>Trade</strong><strong>Stocks </strong>& BTNURL=<a data-lark-is-custom="true" href="https://www.mexc.com/trade-stocks">https://www.mexc.com/trade-stocks</a>*</span></div><div class="ace-line ace-line old-record-id-QrsRd4EUKoZ6tlxqoJvufPnCspd"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-Qz9RdtaNqo6KHBxEdCBudkMus1g"><strong>1. Core Trading Rules of the US Stock Market</strong></h2><div class="ace-line ace-line old-record-id-DKugdCgkFotqBSxO4YmufLGKsk0"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-DnR9dXc1woJ9asxXo6EuPJgmsMh"><span style="font-size: 16px;">1.1 Minimum trading unit</span></h3><div class="ace-line ace-line old-record-id-DMj5dn8i8opeABxDRLQuoAnqsDY"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VqNRdvYfEoNCjZxdVZsulkjBsdV"><span style="font-size: 16px;">The minimum trading unit in the US stock market is 1 share. Compared with the A-share market, where purchases typically start from 100 shares, and the Hong Kong stock market, which trades in board lots, the US market has a much lower entry threshold. This system allows investors to allocate their portfolios more flexibly based on their available capital. Even for high-priced stocks, investors can participate by purchasing a smaller number of shares.</span></div><div class="ace-line ace-line old-record-id-AooVdBaTyo9nALxuWlDuGQu8sYe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-ETmtdJMhAoOYXZxsga5uqzjgsUC"><span style="font-size: 16px;">1.2 Same-day round-trip trading system</span></h3><div class="ace-line ace-line old-record-id-XFLsdV8Jkozar8ximH6u9ybTs2g"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-K2GVdOXlKoDUqHxZJl7ut0ZQsvd"><span style="font-size: 16px;">The US stock market follows a T+0 trading system, which means investors can sell a stock on the same day they buy it. This system provides higher capital efficiency and greater trading flexibility, making it particularly suitable for strategies that need to respond quickly to market changes.</span></div><div class="ace-line ace-line old-record-id-Yxo8d5he5oPED8xwI6YuMwJ0szg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-X8JbdFquKomNzixJ5s2unPfVstg"><span style="font-size: 16px;">It is worth noting that although trading follows a T+0 model, cash and securities settlement still follows a T+1 cycle. In practice, this means that after selling a stock, the proceeds can usually be used immediately for further trading, but can only be withdrawn after settlement is completed on the next trading day.</span></div><div class="ace-line ace-line old-record-id-TrVEdinD4oDYKwxhnHNuGJHmsKf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UlTHdOfVroLixSx9AZTulnnRsIe"><span style="font-size: 16px;">For example, if an investor buys and sells a stock on Monday, the sale proceeds will be settled on Tuesday. Only after settlement is completed can the funds be withdrawn.</span></div><div class="ace-line ace-line old-record-id-P5DydfCZio2FAaxepMduvxJhsnh"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-RXeBdTnrYofKWexVyyZuVwxvsSe"><span style="font-size: 16px;">1.3 Minimum price movement</span></h3><div class="ace-line ace-line old-record-id-RoHwdrMdUozLHYxLu4huqNLKsNf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AjVKd1hK0ogsy3xgirmuhEGDsmb"><span style="font-size: 16px;">The minimum price movement, also known as the tick size, varies depending on the stock price:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Af4ndnNOEoQUCIxnw9Iu5K2vsAe" data-list="bullet"><div><span style="font-size: 16px;"><strong>For stocks priced at $1 or above</strong>, the minimum tick size is $0.01</span></div></li><li class="ace-line ace-line old-record-id-RmJSdMmIBoT8FZxcJADub04wszd" data-list="bullet"><div><span style="font-size: 16px;"><strong>For stocks priced below $1</strong>, the minimum tick size is $0.0001</span></div></li></ul><div class="ace-line ace-line old-record-id-JziYdxVzpobNFFxBuBmub11fstb"><span style="font-size: 16px;">This rule helps ensure appropriate pricing precision across different price ranges and supports more efficient price discovery in the market.</span></div><div class="ace-line ace-line old-record-id-SjKpdUBbhoOTInxCvd4uTp4dsMK"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FfxvdE1OlojNdRxN2BMuMSqasxd"><span style="font-size: 16px;">1.4 Stock ticker system</span></h3><div class="ace-line ace-line old-record-id-Y326dseyVoTlzox4gGBuxXUIsig"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-BwK0dqwmTod6jCxG4cEuAxyzsuh"><span style="font-size: 16px;">US stocks use a ticker symbol system made up of letters, usually 1 to 5 characters, representing an abbreviation of the company name. For example: AAPL for <a data-lark-is-custom="true" href="https://www.apple.com/">Apple</a>, MSFT for <a data-lark-is-custom="true" href="https://www.microsoft.com/zh-cn">Microsoft</a>, TSLA for <a data-lark-is-custom="true" href="https://www.tesla.com/">Tesla</a>, and KO for <a data-lark-is-custom="true" href="https://www.coca-colacompany.com/">Coca-Cola</a>.</span></div><div class="ace-line ace-line old-record-id-OkMzdtSTAogolIx43skuO1xosge"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-ZL6vdWrkuoWdO7xeJ3ru0ASvsBh"><strong>2. Price Limits and Circuit Breaker Mechanisms in the US Stock Market</strong></h2><div class="ace-line ace-line old-record-id-ZCL5d5PMSoP566xZyofun5fZsJe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-L3dedWOszoHz7RxdFaduKrmUsfd"><span style="font-size: 16px;">2.1 Daily price movement rules</span></h3><div class="ace-line ace-line old-record-id-WvXYdRaB2oGIa9x8b80uKrFvsUg"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-NdCYd20jooYdGwxM7J7uToixsbi"><span style="font-size: 16px;">The US stock market does not impose a daily price limit. In theory, a US stock may rise or fall by more than 20% in a single trading day. While this gives investors greater upside potential, it also means they are exposed to higher price volatility.</span></div><div class="ace-line ace-line old-record-id-IsJ8dAhSToZU7NxSZVbuxkfXsbb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AqHJdZ5yvo9g6FxAkHUuhYHLsJh"><span style="font-size: 16px;">Risk reminder: When investing in US stocks through MEXC's partner licensed broker, investors should carefully assess their own risk tolerance, allocate their portfolios prudently, and avoid excessive concentration in a single stock.</span></div><div class="ace-line ace-line old-record-id-AnEGdtCTzosddtxR8R9uDXLJsMe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-JPzwdyfSvoQcdHxlvzruvAcXssh"><span style="font-size: 16px;">2.2 Three-tier market-wide circuit breaker system</span></h3><div class="ace-line ace-line old-record-id-EGVpdfWbToKxL6xR4nTuGknGs3b"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HjusdAVrToZeUBxeVTfuefZUsFp"><span style="font-size: 16px;">To prevent excessive market volatility and panic selling, the US stock market has established a three-tier market-wide circuit breaker system based on the <a data-lark-is-custom="true" href="https://en.wikipedia.org/wiki/S%26P_500">S&P 500 Index</a>. The purpose of this mechanism is to provide a cooling-off period by pausing trading, allowing investors more time to assess risks rationally.</span></div><div class="ace-line ace-line old-record-id-BKdCdXspjoaCHVx3ZwwuwBlFsch"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-UETCde2y5oPiogx2dgKulWD7svg"><strong style="font-size: 16px;">Level 1 circuit breaker: S&P 500 falls by 7%</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-PzBvdktZco3CLKxBNVWuHrPYsqf" data-list="bullet"><div><span style="font-size: 16px;">If triggered between 9:30 a.m. and 3:25 p.m. ET, trading across the market is paused for 15 minutes</span></div></li><li class="ace-line ace-line old-record-id-D4DSdHqYjoNr4OxGybDu0LGfsQd" data-list="bullet"><div><span style="font-size: 16px;">If triggered after 3:25 p.m. ET, trading continues with no halt</span></div></li><li class="ace-line ace-line old-record-id-R8SgdzCzHoqBTFxu7BAunt5YsbY" data-list="bullet"><div><span style="font-size: 16px;">Can only be triggered once per trading day</span></div></li></ul><div class="ace-line ace-line old-record-id-DgGndFRQsotDKyxMxoDuZMwCsTe"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Xo9zdgRijokNiixr7v0uO4J2sde"><strong style="font-size: 16px;">Level 2 circuit breaker: S&P 500 falls by 13%</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-N8S7d490GoXq1xxQIieuw112sZc" data-list="bullet"><div><span style="font-size: 16px;">The trading halt rules are the same as Level 1</span></div></li><li class="ace-line ace-line old-record-id-Cv4MdgO7WoS28NxlqcoupWSjszf" data-list="bullet"><div><span style="font-size: 16px;">Can only be triggered once per trading day</span></div></li><li class="ace-line ace-line old-record-id-BJHNdB977o6pfkxHZqLu3gOysEh" data-list="bullet"><div><span style="font-size: 16px;">Level 1 and Level 2 are counted independently within the same trading day</span></div></li></ul><div class="ace-line ace-line old-record-id-Ak3tdTqc6oUPlcxiMRkumfyisyh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Uslrds3lYoQk3wxApXHuGOZasGh"><strong style="font-size: 16px;">Level 3 circuit breaker: S&P 500 falls by 20%</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-AVA2dA8dNoqhTJxXsNUuTFShsuh" data-list="bullet"><div><span style="font-size: 16px;">Trading across the market stops immediately, regardless of the time</span></div></li><li class="ace-line ace-line old-record-id-Z9JydnIw8o2y4oxiIriuW2FRs1e" data-list="bullet"><div><span style="font-size: 16px;">Trading remains halted until the next trading day</span></div></li></ul><div class="ace-line ace-line old-record-id-G1HzdcYmioZV2FxG7Bkuwe4AsPd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-AEjBd8dpiorIllxgFAHuy8lrsib"><span style="font-size: 16px;">The circuit breaker mechanism is designed to:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-JhY2dkhZPoClU2xmg47uuSHrsfg" data-list="bullet"><div><span style="font-size: 16px;">Give market participants time to cool down and reassess</span></div></li><li class="ace-line ace-line old-record-id-KAY4dGqz0ozRnAxqq9OuEkEoscA" data-list="bullet"><div><span style="font-size: 16px;">Prevent panic from spreading too quickly through the market</span></div></li><li class="ace-line ace-line old-record-id-Zxc4dLjgPogB3kxLOP9u0IrRsUc" data-list="bullet"><div><span style="font-size: 16px;">Reduce the impact of irrational trading behavior</span></div></li><li class="ace-line ace-line old-record-id-RjzGdWsY4opib5xml0MutyNVsRg" data-list="bullet"><div><span style="font-size: 16px;">Help preserve orderly liquidity and price discovery</span></div></li></ul><div class="ace-line ace-line old-record-id-DI7IdFJjvoRATTx4sofuePXWs9g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SsgqdwPxRoRCfXxpRGYulJCnsub"><span style="font-size: 16px;">2.3 Single-stock trading pauses (Limit Up-Limit Down, LULD)</span></h3><div class="ace-line ace-line old-record-id-KaaUdJZuxoSp2gxIVF0uP67yshh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Wk5kdTilio6WaHx9JvPucg56sth"><span style="font-size: 16px;">In addition to market-wide circuit breakers, individual stocks may also be subject to trading pauses when they experience abnormal price swings. This is known as the Limit Up-Limit Down (LULD) mechanism. Its core purpose is to reduce extreme volatility by imposing a temporary pause in trading.</span></div><div class="ace-line ace-line old-record-id-SpcTdgVNxod9TUxBKZUuEYJXsih"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Iz16dUOsJoGpISxhINku26cosMe"><strong style="font-size: 16px;">Length of trading pause after being triggered</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-MnTjdkeHhosCfdxNx1EuOBPWsD9" data-list="bullet"><div><span style="font-size: 16px;">Standard pause: If a stock moves beyond the permitted price band within 5 minutes, trading will be automatically paused for 5 minutes</span></div></li><li class="ace-line ace-line old-record-id-D8S0dlpUDoBSncx2FjWuoOKEs9b" data-list="bullet"><div><span style="font-size: 16px;">In extreme cases: If the price does not return to the permitted range after 5 minutes, the pause may be extended depending on market conditions and liquidity</span></div></li></ul><div class="ace-line ace-line old-record-id-KUS9d0GxCoaiu4xYJbGuXpeVs8d"><span style="font-size: 16px;"><br></span></div><div style="white-space:pre;" class="ace-line ace-line old-record-id-UYIDdcX6Moz0gbxmssiuA7klsCd"><span style="font-size: 16px;"><strong>Volatility thresholds by stock type</strong>
The trigger threshold depends on the stock's liquidity tier and price range.</span></div><div class="ace-line ace-line old-record-id-KAKedL9Sjo3pFExLEw3ubEDqsXc"><span style="font-size: 16px;"><br></span></div><div><table class="ace-table" data-ace-table-col-widths="414;320" style="border:none;border-collapse:collapse;table-layout:fixed;width:500px;"><colgroup><col width="414"><col width="320"></colgroup><tbody><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-IAyJduWFYomIizxIKKZulytPsOh"><strong style="font-size: 16px;">Stock Type</strong></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-JmUCdwc0YoWw6ExznawujrO3sTc"><strong style="font-size: 16px;">5-Minute Price Movement Threshold</strong></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-T2L6ddyxgoejrnxpLklu7xCbszb"><span style="font-size: 16px;">Tier 1 Stocks (such as S&P 500 and Russell 1000 constituents)</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Ihypd1m9loxoOxxF6yUupEzXs1e"><span style="font-size: 16px;">5%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-ZNZpdOlMPoISSsxKwE7ub97xsJb"><span style="font-size: 16px;">Tier 2 Stocks (other standard listed stocks)</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-H3uOduXXAoKkpPxUguNuzwhLsdc"><span style="font-size: 16px;">10%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-MbvldMtrnolfSDxP1onu37DTsfg"><span style="font-size: 16px;">Lower-Priced Stocks (priced between $0.75 and $3)</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-XossdNqKEomQ9Ox1wQqu4DGWsph"><span style="font-size: 16px;">20%</span></div></td></tr><tr style="height:39px;"><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-BWlUdDIvFoiT54xFV2Nub6iKsxc"><span style="font-size: 16px;">Very Low-Priced Stocks (priced below $0.75)</span></div></td><td colspan="1" rowspan="1" style="border: 1px solid rgb(222, 224, 227); padding: 8px; vertical-align: top; font-size: 10pt;"><div style="text-align:center" class="ace-line ace-line old-record-id-Olo6ds4yKoQUW1xYINHuksYYsmh"><span style="font-size: 16px;">The lower of $0.15 or 75%</span></div></td></tr></tbody></table></div><div class="ace-line ace-line old-record-id-ECDzdFEFvoYo8SxGRjduT33psmf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-GYdzdlICpo1OKLxBsN2u4kZlspg"><strong style="font-size: 16px;">Time-of-day differences</strong></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Fzt6dm2soorosRxYoGzumSissGc" data-list="bullet"><div><span style="font-size: 16px;">At the open and close: Between 9:30 - 9:45 a.m. ET and 3:35 - 4:00 p.m. ET, thresholds are generally doubled because volatility tends to be higher during these periods</span></div></li><li class="ace-line ace-line old-record-id-QFtnduxqYoGEbZxy9zuuRK0hsqc" data-list="bullet"><div><span style="font-size: 16px;">Pre-market and after-hours trading: The LULD mechanism applies only during regular trading hours (9:30 a.m. - 4:00 p.m. ET) and does not apply to extended-hours trading</span></div></li></ul><div class="ace-line ace-line old-record-id-Eim2ddBgboCLI2x639tu5Onxs0l"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-JZlEdXUwkoY9MtxDUvGu3uTSszh"><strong>3. Tax Rules and Trading Restrictions in the US Stock Market</strong></h2><div class="ace-line ace-line old-record-id-BWnWdXKW6oSukFx5NjXutd6WsTg"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-M3PLdH4bpoug4AxLGMsu5Vcxswe"><span style="font-size: 16px;">3.1 Dividend tax</span></h3><div class="ace-line ace-line old-record-id-FiGldmQnoow4sgxprH5ufhMNsTd"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-HRaYdupXMo8Ta2xGmIXunrGBsqd"><span style="font-size: 16px;">Non-US investors should understand the tax rules related to US stock investing:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-McoedyMrxoduJkx0xDTur6FnsLf" data-list="bullet"><div><span style="font-size: 16px;"><strong>Dividend withholding tax:</strong> Dividends received by non-US investors are generally subject to a 30% US federal withholding tax. For certain countries and regions, the rate may be reduced to 10% or 15% under an applicable tax treaty.</span></div></li><li class="ace-line ace-line old-record-id-QmJtdTEJxoElPqxMjhzuUtxJszA" data-list="bullet"><div><span style="font-size: 16px;"><strong>Capital gains tax:</strong> Capital gains earned by non-US investors from buying and selling stocks are generally not subject to US federal tax.</span></div></li></ul><div class="ace-line ace-line old-record-id-PNPRd6f6foo49QxG6l6u7gtOsUh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DRXgdoXVSorSxmxD0smuUFlksen"><span style="font-size: 16px;">Examples:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-Ho4DdATjyovyyoxm2OFu7gPCsPe" data-list="bullet"><div><span style="font-size: 16px;">Dividend example: If a stock pays a $100 dividend, the investor may receive about $70, while $30 is withheld as dividend tax.</span></div></li><li class="ace-line ace-line old-record-id-DI5Wd3JSAoQmvcxACY9u0BJvsdc" data-list="bullet"><div><span style="font-size: 16px;">Capital gains example: If an investor buys a stock at $50 and sells it at $80, the $30 capital gain is generally not taxed by the US, although it may still need to be declared under the tax laws of the investor's country or region.</span></div></li></ul><div class="ace-line ace-line old-record-id-RzP9d2tzJojMadxMr3luMIWysUh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-Xqmzd6lOOoNEDbxAuX6u0aPHszh"><span style="font-size: 16px;">Note: Actual tax treatment may vary depending on the investor's country or region and any applicable tax treaty. Investors are advised to consult a professional tax advisor for accurate guidance.</span></div><div class="ace-line ace-line old-record-id-JxnwdlqHWoH5rkx8XpaumwR8s4z"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-FQmBd22zToDQWSxAtJSuSnOSs22"><span style="font-size: 16px;">3.2 Day trading restrictions</span></h3><div class="ace-line ace-line old-record-id-WLwUdmfgNoQazKxEiIUursWUsL9"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QFEJdv79Cob3RgxRH2BuX0Tnsxg"><span style="font-size: 16px;">The US Securities and Exchange Commission (SEC) applies the Pattern Day Trader (PDT) Rule to margin accounts (but not cash accounts).</span></div><div class="ace-line ace-line old-record-id-GD9Vd4YcZoRxYvx8jIguBFhTsMh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-KVyPdGngUorB17xcPcqu11EEsEg"><span style="font-size: 16px;">Trigger conditions:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-ZYihdlMXxoza1txS8frugd03srf" data-list="bullet"><div><span style="font-size: 16px;">You make more than 3 day trades within 5 consecutive trading days</span></div></li><li class="ace-line ace-line old-record-id-GZbLdOkXGobo5zxGnwgu50iTs0O" data-list="bullet"><div><span style="font-size: 16px;">And your total account equity is below $25,000</span></div></li></ul><div class="ace-line ace-line old-record-id-Cat1dqzZLo4Or5x9OBfujDgTsng"><span style="font-size: 16px;"><br></span></div><div style="white-space:pre;" class="ace-line ace-line old-record-id-JpfDdyjnVoldRQxFqYAuFuzbsFf"><span style="font-size: 16px;">Restriction:
If both conditions are met, the account may be designated as a pattern day trader and become subject to trading restrictions, including limits on opening new day trades.</span></div><div class="ace-line ace-line old-record-id-AzE4dku20oJ1DxxN0DsuGFnKsEe"><span style="font-size: 16px;"><br></span></div><h2 class="heading-2 ace-line old-record-id-FruXdoHBeo3kedxTNFauCCMOs4g"><strong>4. Frequently Asked Questions</strong></h2><div class="ace-line ace-line old-record-id-OGtCdL6NlokBnMxqzoBufoejs8g"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Yl8PdLZ3loGckkxulNtujFVosUg"><span style="font-size: 16px;">4.1 Can I buy and sell US stocks on the same day?</span></h3><div class="ace-line ace-line old-record-id-SN40dqeRsoEPBBxEjHPumPV3shb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-XXW9dyKGLoAraBxKmFBuSmRFsoh"><span style="font-size: 16px;">Yes. The US stock market follows a T+0 trading system, which means stocks bought on the same day can also be sold on the same day. However, settlement follows a T+1 cycle, so proceeds from selling stocks are generally not available for withdrawal until the next trading day after settlement is completed.</span></div><div class="ace-line ace-line old-record-id-LWPvdSg0noGAYyxDENguCW7ysWf"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-UtAKdKMxho5G03xRNMtuFH4Ysbf"><span style="font-size: 16px;">4.2 Are there daily price limits in the US stock market?</span></h3><div class="ace-line ace-line old-record-id-DHlyddgQGo4HvxxZh5OukniksQf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-EpA0dSSJKo5gWDxbFyTuI04osed"><span style="font-size: 16px;">No. The US stock market does not have a daily price limit. However, it does have a circuit breaker mechanism for risk control. If the S&P 500 Index falls by 7%, 13%, or 20% from the previous day's close, different levels of market-wide trading halts will be triggered.</span></div><div class="ace-line ace-line old-record-id-NmqUdflDioOZWtxBGN1ukUREsZe"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-Qo0qdpZatoKx6mxVPUuu176hs7o"><span style="font-size: 16px;">4.3 What is the minimum number of shares I can buy in US stocks?</span></h3><div class="ace-line ace-line old-record-id-GsK7drmBsohPNixonUPuurdTs8z"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VtAkduqdbomkXRxAkDVurEsTszb"><span style="font-size: 16px;">The minimum trading unit for US stocks is 1 share. This gives investors more flexibility and lowers the barrier to entry compared with some other stock markets.</span></div><div class="ace-line ace-line old-record-id-DFlxdlE7IojXdWx13k6uciV0swd"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-SbHIdvO4kocx3DxxcKyuo2BjsXb"><span style="font-size: 16px;">4.4 Do I need to pay tax on US stock dividends?</span></h3><div class="ace-line ace-line old-record-id-CTNCdOxrsoTfTBxcI1su0f3fs1f"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-VzIFd2YHEo26tIx2iIzuwsLCsOf"><span style="font-size: 16px;">Yes. Dividends received by non-US investors are generally subject to a 30% withholding tax, although the rate may be reduced to 10% or 15% under certain tax treaties. Capital gains from stock trading, however, are generally not taxed by the US. Investors should consult a professional tax advisor for specific tax guidance.</span></div><div class="ace-line ace-line old-record-id-PV5SdFvFno6Cn9xwCq2utzutskc"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-EhscdsQKtoCrR2xyzMXu02a8sug"><span style="font-size: 16px;">4.5 What is the US stock market circuit breaker mechanism?</span></h3><div class="ace-line ace-line old-record-id-XYPcdjyacoqwE2xYWd7uXffbs7d"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-QVwKdvcKuoVcjbxGb8guv4IKsFe"><span style="font-size: 16px;">The circuit breaker mechanism is a market protection measure that temporarily pauses trading during sharp market declines. Using the S&P 500 Index as the benchmark:</span></div><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-ARGLddaX7oDTKGxO0LjuxcgnsAd" data-list="bullet"><div><span style="font-size: 16px;">A 7% drop triggers a Level 1 circuit breaker and a 15-minute halt</span></div></li><li class="ace-line ace-line old-record-id-OvnFdaPeBonF3CxoDDxuCEMRsSd" data-list="bullet"><div><span style="font-size: 16px;">A 13% drop triggers a Level 2 circuit breaker and another 15-minute halt</span></div></li><li class="ace-line ace-line old-record-id-ZJVfdBuvKooNmVx2o7mugzu9sfb" data-list="bullet"><div><span style="font-size: 16px;">A 20% drop triggers a Level 3 circuit breaker and stops trading for the rest of the day</span></div></li></ul><div class="ace-line ace-line old-record-id-R1wqda5h6odOAsxbyRPuHQbDsig"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-N27Id7Bjxo4rsexpgUsuI8evsOg"><span style="font-size: 16px;">The purpose of this mechanism is to provide a cooling-off period, reduce panic selling, and help maintain orderly market conditions.</span></div><div class="ace-line ace-line old-record-id-Y7XedGLhOoOIuYxByEgu6lrWs5f"><span style="font-size: 16px;"><br></span></div><h3 class="heading-3 ace-line old-record-id-CqITdbeyuocNX2xlepKueXmcsfb"><strong style="font-size: 16px;">Recommended reading:</strong></h3><ul start="1" class="list-bullet1"><li class="ace-line ace-line old-record-id-FdT1dH56VoI4roxQGU3uNX8zswc" data-list="bullet"><div><a data-lark-is-custom="true" href="https://www.mexc.com/learn/article/17827791534414" style="font-size: 16px;">What Is Stocks? </a></div></li><li class="ace-line ace-line old-record-id-FX5Qdvx7aoFL1JxiVRtujPEZsU0" data-list="bullet"><div><a href="https://www.mexc.com/support/article/stocks-trading-faq-331372918914059264" data-lark-is-custom="true" style="font-size: 16px;">Stocks Trading FAQ </a></div></li><li class="ace-line ace-line old-record-id-Cw0ndl27qoes6Kxd0miuv7yJsgh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/a-guide-to-the-three-major-us-stock-exchanges-and-indexes-350109095267644416" data-lark-is-custom="true" style="font-size: 16px;">A Guide to the Three Major US Stock Exchanges and Indexes</a></div></li><li class="ace-line ace-line old-record-id-V8TudnTSMo6KKpxkqR6ul8t0sAh" data-list="bullet"><div><a href="https://www.mexc.com/support/article/us-stock-market-trading-hours-and-holidays-357457114296227840" data-lark-is-custom="true" style="font-size: 16px;">US Stock Market Trading Hours and Holidays: A Time Zone Guide </a></div></li><li class="ace-line ace-line old-record-id-SRrTdRJgPoGeiVxTh38uhOwys3d" data-list="bullet"><div><a href="https://www.mexc.com/support/article/a-guide-to-us-stock-overnight-trading-357458016239358976" data-lark-is-custom="true" style="font-size: 16px;">A Guide to US Stock Overnight Trading: Trading Hours, Rules, and Risk Analysis </a></div></li></ul><div class="ace-line ace-line old-record-id-RFE1dWN5Conm18xhXjfuV9qPsKb"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-H9j7dhoaloIITJxQ2hHu8CFgsYd"><strong style="font-size: 16px;">Disclaimer:</strong></div><div class="ace-line ace-line old-record-id-Oje9d7RXwoikXNxEhI7ufHPisGh"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-JFVMdSFUDoxcMgxp5ddubN5NsNb"><span style="font-size: 16px;">The information provided herein is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. MEXC is not a registered investment advisor or broker-dealer. All investment strategies and investments involve risk of loss. Any content contained herein should not be relied upon as advice or construed as providing recommendations of any kind. Always conduct your own research and consult with a licensed financial professional before making any investment decisions.</span></div><div class="ace-line ace-line old-record-id-ISFLdpGZfoXbbWxeOCcuTnAhsuf"><span style="font-size: 16px;"><br></span></div><div class="ace-line ace-line old-record-id-DcQgdnAEOoh7P0xn8qyuQ6SWsSc"><span style="font-size: 16px;">By participating in these investment activities you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any trading or investment activities.</span></div><div class="ace-line ace-line old-record-id-GA5cdSje1o04gqxKf3YuaYVgsYd"><span style="font-size: 16px;"><br></span></div></div>