What is CA stock and why do investors need to become familiar with it?

When entering a trading application, you may have noticed mysterious abbreviations appended to stock names, such as CA, XD, XM, T1. What do they mean, and why is it important to understand them before trading? This article will clearly explain the meanings of these symbols to help make your investments safer and more effective.

CA - Signal of upcoming corporate actions

CA stock stands for “Corporate Action,” which indicates a company’s action. It appears on stocks to alert investors that “within the next 7 days, this stock will undergo a significant change.”

When you see the CA symbol, simply clicking on it will display details about what event will occur, when, and how it will affect shareholders’ rights. These symbols can be divided into three main groups, each with completely different meanings.

X family - Symbols indicating loss of rights

All symbols in this group start with the letter X, which stands for “Excluding,” meaning “if you buy the stock at this time, you will not receive certain rights.” Each symbol has a different meaning:

XD (Excluding Dividend) - No dividend received
If you buy when XD appears, you forfeit the right to receive dividends for that period. However, if you hold the stock and the symbol changes to no longer show XD, you will receive dividends in the next cycle. The simplest way is to buy before the XD date (or the day prior) to receive dividends.

XM (Excluding Meetings) - No voting rights at shareholder meetings
If you buy when XM appears, you cannot participate in important company meetings where shareholders vote on key issues.

XW (Excluding Warrant) - No warrant shares
Warrants are “sub-shares” issued by the company that can be converted into main shares. If not marked with XW, it means you do not have the right to purchase or convert warrants into main shares.

XR (Excluding Rights) - No rights to subscribe for new shares
When a company issues new shares to raise capital, if XR appears, you do not have the right to subscribe for these shares.

Other symbols in the X group include XS (short-term warrant rights), XT (transferable rights certificates), XI (interest), XP (principal), XA (all rights), XE (convertible rights), XN (refunds from capital reduction), XB (other rights), each with specific meanings.

T-level alerts - Trading risk indicators

When a stock’s price surges sharply and speculation is high, the stock exchange implements measures to prevent rapid price increases, indicated by the T symbol, which is divided into T1, T2, T3 levels.

T1 (Trading Alert Level 1) - First warning level
Stocks with T1 can only be bought with a cash account for 3 weeks.

T2 (Trading Alert Level 2) - Second warning level
If after no more than one month the stock still meets T1 criteria, it upgrades to T2, which requires not only a cash account but also prohibits using the stock as collateral.

T3 (Trading Alert Level 3) - Highest warning level
If it remains within criteria after an additional month, it becomes T3, which not only bans collateral use but also restricts settlement. This means if you sell stocks on the same day, the buying power is restored the next day, not immediately, to prevent multiple trades within a single day.

Other warning signals investors should watch out for

H (Trading Halt) - Temporary trading suspension for one session
Occurs when news leaks out but the company has not officially announced to the stock exchange.

SP (Trading Suspension) - Suspension exceeding one session
Similar to H but for longer periods or due to reasons like failure to submit financial statements.

NC (Non-Compliance) - Company is at risk of delisting
If a company incurs losses over a long period or fails to submit financial reports within the deadline, it has one year to rectify.

C (Caution) - Highest warning signal
Indicates the company has cash flow problems, shareholder equity below 50%, or is undergoing restructuring. Investors should avoid investing in this stock for now.

Remember these key points for safe trading

Understanding the symbols appended to stocks, such as CA and others, is a fundamental skill every investor must learn before planning investments. Each symbol aims to protect shareholders and maintain market fairness.

By knowing what CA and other symbols mean, you can make more informed investment decisions and avoid unnecessary risks from buying stocks with uncertain changes. Remember, investing involves risks. Always study sufficient information before making decisions.