Recently, while watching the market, I found that many people still have some misconceptions about buying and selling stocks on the same day. In fact, Taiwan has already allowed cash intraday trading for many years. At present, intraday trading accounts for nearly 40% of Taiwan stock market trading volume, and the number of users has kept increasing, but many beginners still don’t know how to operate it.

Simply put, intraday trading means buying and selling on the same day, without waiting for settlement on the next day. Under the T+2 trading system, brokers use margin financing and securities lending to enable T+0 trading—so you can close your position on the same day and also avoid the risk of holding stocks overnight. For example, if you buy TSMC at 9:15 a.m., you can sell it at 2:30 p.m., and you don’t need to worry that sudden overnight news will crash the market.

But here’s the key point—intraday trading is not a “zero-capital” business. Many people are drawn in by that idea and jump in, only to be harmed by leverage. Cash intraday trading requires your own funds, while margin intraday trading involves borrowing money or borrowing stocks from the broker, and the costs are not low. Just in terms of fees and securities transaction tax, a single cash intraday trade costs 0.29%. If you trade 5 times in a day, the cost jumps to 1.45%, meaning the stock needs to rise significantly to break even.

Taiwan’s stock market basically has no limit on the number of intraday trades. As long as you have sufficient funds during trading hours (from 9:00 a.m. to 1:30 p.m.), you can trade as many times as you want. But in reality, what holds you back are your capital limits, the list of stocks eligible for intraday trading, and the restrictions on stocks labeled as “attention stocks.” Odd lots cannot be traded intraday at all, and some stocks are also prohibited.

The logic for going long is straightforward—you expect the price to rise, so you buy and sell within the same day. Going short is the opposite: you sell first, then buy back. Different instruments have different rules. For example, futures and options are inherently T+0, so buying and selling on the same day has no extra cost, but leverage risk is higher. CFDs have the lowest threshold—you can open an account with only a few tens of dollars. They’re suitable for short-term swing trading, but they are also leveraged instruments, so you need to manage the risks yourself.

To be honest, intraday trading looks very appealing: you can stop loss quickly and complete settlement on the same day. But the premise is that you have enough time to monitor the market and the ability to control risk. There are too many variables during market hours—rising then falling sharply, or falling then rebounding sharply, are both common. If you make a wrong judgment and your stop loss isn’t timely, your losses can be significant. Also, frequent trading accumulates substantial transaction fees, and these intermediary costs often wipe out your profits.

My recommendation is: if you’re interested in buying and selling stocks on the same day, start with cash intraday trading, which at least doesn’t involve leverage. To open an account, you need to have at least 3 months of account history, more than 10 trades in the past year, and you also need to sign a risk disclosure statement. The threshold for margin intraday trading is higher—you also need trading value of at least 250,000 NTD in the past year.

Overall, intraday trading is suitable for short-term traders, but not for people who lack sufficient capital or have poor risk tolerance. Although same-day settlement eliminates overnight risk, it brings higher trading costs and psychological pressure. If your judgment is wrong, it’s easy to fall into a situation with losses—or even a default. So before deciding to enter the market, you really need to think through whether you’re suited for this kind of trading.