Brokerage Firm / Broker

For a platform, what is most damaging from regulatory crackdowns on illegal cross-border activities is not the stock price for one or two days, but the potential reassessment of its entire historical growth model. Fines are one account; whether the retained domestic customer base can continue to contribute transactions, financing, assets, and conversions is another, much longer-term concern.

The greatest strength of internet brokers like Futu and Tiger is their ability to make Hong Kong and US stock trading a low-friction product. The problem is that when this experience faces mainland users, it encounters barriers related to licensing, foreign exchange regulations, suitability assessment for investors, data handling, and the boundaries of cross-border financial services.

Therefore, the third section should focus only on the business model and institutional stratification. Although the product capability of cross-border securities firms remains strong, if regulatory boundaries re-enclose the largest and most readily available user base, its valuation can no longer be predicated on old growth stories.

Regarding this problem/issue from Futu, I will state the conclusion first.

Futu Securities currently defaults to displaying cost-averaging, which is not what many people understand as simply calculating an average based only on buys and ignoring sells. Extending this concept further, Hong Kong brokers do not have a unified default methodology. If it is a holdings page aimed at Chinese retail investors, common display methods include cost-averaging, average cost, and breakeven price (or principal protection price). However, if the broker is an international firm like IBKR that places more emphasis on tax lots and statement consistency, FIFO (First-In, First-Out) is generally the default method.

When discussing domestic brokerage firms, if we refer to the most common field in A-share trading clients—the “Cost Price/Holding Cost Price”—it is more commonly focused on the diluted cost basis or break-even price, rather than simply the average purchase price. This is just because different brokerages do not have standardized naming conventions; some call it “holding cost,” others call it “diluted cost,” and some provide a separate figure for the “average purchase price.”