I happened to see someone asking whether you can buy at the limit-up, and this is indeed a point that confuses many beginners. I’ll share my understanding.

First, the conclusion: both limit-up and limit-down are tradable, but the key is whether you can actually get a fill. Many people think that once a stock hits the limit-up, it’s completely unable to move—but that isn’t true.

What is the essence of a limit-up? It’s when the stock price rises to the highest limit allowed for that day. In Taiwan stocks, this means the price can’t increase by more than 10% compared with the previous day’s closing price. For example, if TSMC closed at 600 yesterday, today it can only rise to 660 at most. But this doesn’t mean trading stops; it only means the price is “frozen” at that level. When you look at the order book, you’ll find people who want to buy lining up in a long queue, while there are very few people who want to sell. So, can you buy at the limit-up? Of course you can place an order—but your buy order will go to the back of the line, and whether it gets filled depends on luck. On the flip side, if you want to sell, it’s basically filled instantly, because there are so many buy orders.

The situation for limit-down is exactly the opposite. The stock price falls to the day’s lowest limit, with a lot of people wanting to sell and very few wanting to buy. So instead of asking “Can I buy at the limit-down?”, it’s really the reverse question: can I sell at the limit-down? The answer is yes—you can place an order, but it may not fill immediately. However, on the buy side it’s basically instant, because there are so many sell orders.

What I especially want to mention is how to deal with limit-down. Many people wait until the stock truly hits the limit-down before they think about selling, but by then it’s often already too late. The smartest approach is to place orders during the call auction as soon as possible, because the trading rule is “price priority, time priority”—the earlier you place the order, the higher your rank. After you place it, don’t乱 change it. Many people see that it hasn’t sold and get anxious, then cancel and re-place orders, but that actually puts them at the very end of the queue. Also, pay attention to the order size for buys at the limit-down price. If suddenly a large amount of buy orders appears, it could mean the main force is entering; in that case, you may consider selling along with them—but you need to be fast, because the window is very brief.

Why do limit-up and limit-down happen? When good news comes—like blockbuster earnings, receiving large orders, or government policy “red envelope” benefits—money rushes in, directly pushing the stock to the limit-up. When TSMC receives Apple’s big order, this is exactly what happens, and the entire semiconductor sector gets lifted as well. AI concept stocks also often hit the limit-up because demand for servers surges. Conversely, on the downside, when bad news hits—earnings disappointments, executives involved in scandals, or the whole industry heading downhill—selling pressure pours in, and stocks can directly go to the limit-down. During the 2020 COVID outbreak, many stocks just stayed there and hit the limit-down. Sometimes it’s driven by technical breakdowns too: once a stock breaks below key supports like the monthly or quarterly moving averages, and stop-loss selling appears, it’s easy for limit-down to follow.

When you encounter limit-up or limit-down, the most important thing is not to blindly chase gains or panic-sell. First, figure out why it’s hitting the limit-up or limit-down. For example, if a stock hits the limit-down but the company itself has no real problems—it's just dragged down by market sentiment—then it very likely may rise back later. Holding or making a small initial position tends to be smarter. When you see a limit-up, don’t rush to chase it; first confirm whether the positive news really can support the stock continuing to rise.

A small tip is to trade related stocks. When TSMC hits limit-up, other semiconductor stocks usually move along with it. Or, if you want to avoid the risk of a single stock, you can consider buying related upstream and downstream manufacturers. Even some Taiwan stocks are listed in the US—like TSMC, which you can buy in the US stock market as TSM.

One more thing: the US stock market doesn’t have the concept of limit-up and limit-down. They use a circuit breaker mechanism. If the S&P 500 drops more than 7%, trading pauses for 15 minutes; if it drops 13%, it pauses for 15 minutes again; if it drops 20%, the market closes for the day. For individual stocks, a temporary move of more than 5% in a short period can also trigger a trading halt. The purpose of this mechanism is to give the market time to cool down and prevent emotions from causing excessive volatility.

In short, the answer to “Can I buy at the limit-up?” is yes, but whether you can get a fill depends on market conditions. The key is to make rational judgments—understand the underlying reasons—rather than acting impulsively based on market sentiment.