What are CA and XD stocks: A beginner's investment guide for novice investors

When you start entering the stock investment world, you’ll encounter various symbols appearing behind stock names, such as CA, XD, XM, T1, and many more. These symbols may seem mysterious to beginners, but for experienced investors, they are crucial information that aids in making investment decisions. This article will help you understand the meanings of these stock suffix symbols and their benefits for your investments.

Understanding the CA suffix after your stock

CA stands for “Corporate Action,” which means “Company Action.” When a stock has the CA symbol, it indicates that the company is about to announce or undertake some action affecting shareholders. Usually, this action occurs within 7 days. You can click on the CA symbol to see details about what the action is and when it will happen.

An important point is that the CA symbol shows upcoming movements in abbreviations like XD, XM, XW, and others, each with different meanings and impacts on shareholder rights.

The X group: meanings and impacts on shareholders

Stock suffixes starting with “X” mean “Excluding” (not entitled). This indicates that if you buy the stock during this period, you will not receive certain rights. Below are details of the X suffix stock symbols that investors should know.

XD - Excluding Dividend

XD is the most important symbol for most investors. When a stock shows XD, it means that if you buy the stock during this period, you will not be entitled to receive the current dividend. However, if you buy before the XD date and hold the stock, you will still receive dividends for this and subsequent periods.

If you wonder “How long do I need to hold the stock to get dividends?” the answer is that you can buy the stock at the latest the day before the XD date, and you will still be entitled to dividends. Also, regardless of when you buy, the dividend rate you receive will be the same for everyone.

XM - Excluding Meetings

When a stock shows XM, buyers during this period will not have the right to attend the company’s shareholder meetings. Shareholder meetings are opportunities for shareholders to participate in decision-making on important company issues.

XW - Excluding Warrant

A Warrant is a type of security issued by the company allowing shareholders to buy additional shares. If a stock shows XW, you will not have the right to receive this Warrant. The exercise ratio is usually 1:1 but can vary.

XR - Excluding Rights

When a company needs to raise additional capital from existing shareholders, it issues new shares for subscription. The XR symbol indicates that if you buy during this period, you will not receive the rights to subscribe for these new shares.

Other X symbols

Besides the above, there are many other X symbols, such as XS (not entitled to Short-term Warrant), XT (not entitled to subscription rights), XI (not entitled to interest), XP (not entitled to principal), XA (not entitled to all rights), XE (not entitled to conversion rights), XN (not entitled to refund from capital reduction), and XB (not entitled to other benefits).

Trading Alert levels T1, T2, T3: what investors need to know

The T symbols appear when a stock’s price surges significantly and speculation increases. The stock exchange implements measures to control such rapid rises, divided into 3 levels.

T1 - Level 1 Trading Warning

T1 means the stock must be traded only through a Cash Balance account. This account is suitable for beginners because it limits trading to the amount of money in your account. T1 appears for 3 weeks after the exchange announces it.

T2 - Level 2 Trading Warning

If a stock remains under T1 after one month, it escalates to T2. In this level, you still must trade via a Cash Balance account, and the stock cannot be used as collateral.

T3 - Level 3 Trading Warning

If conditions persist, the stock is escalated to T3. Besides restricting trading and collateral use, settlement is also prohibited. This means after selling the stock, the buying power is not immediately restored but will be available the next day.

Warning signals: symbols to avoid

Besides CA, X, and T, other symbols indicate various risks.

H - Trading Halt

When some news leaks to the public but the company hasn’t officially announced to the stock exchange, trading is temporarily halted for one session (one trading day has two sessions: morning and afternoon).

SP - Trading Suspension

SP indicates trading is halted for more than one session, possibly due to similar reasons as H, such as unconfirmed news or failure to submit financial statements.

NC - Non-Compliance

Stocks with NC are at risk of delisting from the stock exchange, possibly due to prolonged losses or failure to submit financial reports. The company has 1 year to rectify.

C - Caution

The C symbol warns investors to be cautious. The company may face serious financial problems, shareholders are below 50% of paid-up capital, or auditors have expressed concerns about the financial statements.

Summary: Why understanding symbols like CA and XD is important

Knowing stock suffix symbols is a fundamental skill every investor should have. These symbols are not just natural signs but vital information that helps you make informed investment decisions.

When you see CA after a stock you’re interested in, click to view details to understand how the movement might affect your investment. For stocks with XD, T1, NC, or other symbols, take time to study and analyze before buying or selling.

Investing involves risks, so studying and understanding all information is essential. Often, the difference between successful and unsuccessful investors lies in preparation and comprehension. Don’t let these symbols remain mysterious; instead, use them as tools to reduce your investment risks.