Before opening the GEM, make a risk assessment first to see whether the investor’s risk tolerance matches the risk level of GEM securities trading!

After all, the risk of trading on the GEM is much higher than that on the main board! 1. The nature of listed companies is different

The main board requires profits for three consecutive years, a cumulative net profit of more than 30 million, a large capital scale, relatively strong and stable profitability;

The GEM requires Most of the companies that have been operating continuously for 3 years and are listed on the GEM market are emerging industry enterprises and high-tech enterprises, involving information technology and high-end manufacturing enterprises. They have high growth potential, but they are often established in a relatively short time and are small in scale and have poor operating performance. Stability leads to the risk that the stock price will often rise and fall after listing.

At the same time, the GEM does not go through the ST price range and is a direct delisting mechanism. If the company does not perform well, the possibility of delisting is very high.

It can be seen that the GEM market has low entry barriers and a high possibility of delisting. This low and one high structure is different from the main board market. Although this will help potential small and medium-sized enterprises obtain financing opportunities, It promotes the development and growth of enterprises, but it also places strong requirements on investors’ stock selection abilities, which means that the risks also increase! 2. Different price limit on price increase and decrease

Main board: single day price limit is 10%;

GEM: single day price limit is 20%.

The single-day rise and fall limit is 20%. If a GEM stock is bought at the daily limit on the trading day, the stock will plummet again that day and close at -20% of the daily limit.

If you eat one "Heavenly Floor" a day, a single stock can fall by 40% in a day! It can be seen that the system design of GEM trading allows for large fluctuations in the short term, and its risks are self-evident!

To sum up, before opening the GEM, it is still necessary to do a serious risk assessment, understand your own risk tolerance, and conduct securities transactions within your personal risk tolerance!

This article is the original work of investment consultant Wu Peng. The above content is only for learning and communication and does not constitute any investment advice. We hereby declare! If you think the content makes sense, please give it a like and follow it. Thanks in advance!