Recently, I came across a pretty interesting topic. A friend asked me why some stocks soar rapidly, but trading is extremely difficult, and margin trading and securities lending are unavailable. What's really going on here? Actually, this is what we call the "stock disposal" status, also known as restricted stocks.

What does stock disposal mean? In simple terms, when a stock exhibits abnormal trading activity in a short period—such as excessive price fluctuations, soaring turnover rates, or abnormal trading volume—the Taiwan Stock Exchange will put it on a special observation list, which is called a restricted stock. Once listed, buying and selling the stock are no longer as free as normal stocks; the matching time will be limited, full payment in advance is required, and margin trading and securities lending are directly disabled.

Interestingly, stocks don't immediately jump into the disposal status. Normal stocks are first classified as "attention stocks" (at this stage, trading remains normal). If abnormal conditions persist, they are upgraded to "warning stocks," and only then do they enter the restricted stock status. This process is somewhat like regulatory authorities saying, "We see you; consider this a warning—don't push your luck too far."

Stocks that enter the disposal status are divided into first and second disposal levels based on severity. During the first disposal, matching can only occur once every five minutes, and if a single order exceeds 10 lots or accumulates over 30 lots, full deposit is required; if the situation isn't controlled, it escalates to the second disposal, where matching occurs once every 20 minutes, and both buying and selling require deposit. The purpose of these measures is quite clear: to reduce trading activity and help investors calm down.

Can stocks still rise during the disposal period? It depends on the situation. I looked into some cases: WeiFeng Electronics was once classified as a restricted stock, yet its stock price still rose by 24%. But Yang Ming wasn't so lucky; shortly after entering, it started to fall, and remained sluggish for a long time. So, you can't say restricted stocks will definitely fall, nor can you say they will definitely rise—the key still depends on the company's fundamentals.

There's a saying in the market: "The bigger the closure, the bigger the tail," meaning that some hot stocks, after entering the disposal period, actually see their chips stabilize. Although liquidity becomes poorer, once restrictions are lifted, a new wave of upward movement might follow. That's why some investors are willing to step in during the disposal period. But be cautious—if short-selling forces dump the stock during this time, making it impossible to sell, that can be quite awkward.

To judge whether a restricted stock has investment value, the approach is similar to evaluating normal stocks: look at fundamentals and chip movements. Fundamentals involve analyzing the company's business, financial indicators, and growth potential; chip analysis involves observing the main capital flow. Interestingly, because margin trading and securities lending are restricted during disposal, the buying and selling activities of major players tend to be cleaner, making it easier to see the true market picture.

Before buying, check a few things: whether the stock price is consolidating sideways during the disposal period (avoid if there's a big drop), whether the current valuation is reasonable, and whether your risk tolerance is sufficient. For short-term traders, stock disposal means no day trading, which is a significant impact; but for long-term holders, the longer matching times are not a big deal—there's no rush to sell anyway.

In essence, stock disposal is just a temporary abnormal trading state; it doesn't inherently reflect the company's quality. If you have solid research indicating the company still has investment value, you can consider stepping in even if it's on the restricted list. But the prerequisite is that you trust the company and can accept significant stock price fluctuations.