I've been thinking lately, can stocks be bought and sold on the same day? This question is actually more complicated than it seems.

Since Taiwan's stock market opened up to day trading in 2014, this trading method has become increasingly popular. According to data, nearly 40% of Taiwan stock trading volume is from day trading, and the number of users is growing year by year. The reason many are attracted is simple — buy today, sell today, without holding overnight.

I understand investors' thinking. If you believe a stock will rise during the trading day, why wait until the next day to sell? Same-day trading allows you to quickly cut losses without enduring overnight uncertainty risks. Especially for volatile stocks like tech stocks or small caps, day trading indeed offers more trading opportunities.

But here’s a key point: Taiwan’s stock trading system is fundamentally still T+2. The reason day trading is possible is because brokers act as intermediaries, enabling same-day buying and selling through margin financing and securities lending. In simple terms, if you buy TSMC today and sell it shortly after, the broker handles the settlement, but at the cost of commissions and interest on margin loans.

To engage in cash day trading, certain basic conditions must be met: account opened for at least 3 months, at least 10 trades in the past year, and signing relevant risk agreements. In terms of fees, the transaction tax is 0.15% plus a handling fee of 0.1425%, totaling about 0.29% per buy-sell cycle. It doesn’t sound like much, but if you trade 5 times a day, the cost accumulates to 1.45%. The stock must have a significant price increase to offset these costs.

The threshold for margin and securities lending day trading is even higher. Besides the basic conditions, you need a minimum trading volume of NT$250k in the past year and must open a margin account. The advantage is you can borrow money or stocks, increasing leverage, but the fees are higher (transaction tax 0.3%, handling fee 0.1425%, and average interest on loans around 0.08%).

Honestly, day trading may seem risk-free, but it involves leverage risks. I’ve seen many people attracted by day trading, thinking they can make easy money, only to end up with huge debts due to insufficient capital or poor judgment. This trading style requires high market sensitivity and risk management skills.

Another point to note is that not all stocks can be day traded. Currently, only stocks in the Taiwan 50 Index, the Mid-Cap 100 Index, and the FTSE Taiwan Top 50 Index (about 200 stocks) qualify for day trading. Odd-lot stocks are not available for day trading, and some special treatment or restricted stocks may also be limited.

If day trading is too complicated or too costly for you, there are other options. Futures are inherently T+0, options are too, and Contracts for Difference (CFDs) can also be traded on the same day. These tools have different entry barriers and cost structures, each with their own pros and cons.

In summary, same-day stock trading is indeed feasible, but it’s not as simple as it seems. It requires sufficient capital, sharp judgment, and good control over trading costs. If you are a short-term trader willing to monitor the market and can handle the risks, day trading might suit you. But if your funds are limited or your risk tolerance is low, I recommend starting with swing trading and gaining more experience before considering day trading.