Recently, many people have been asking whether stocks can be bought and sold on the same day, so I’ll briefly share some things about day trading in the Taiwan stock market.

To put it simply, day trading is T+0 trading: you buy today and sell today, without having to wait until the next day to exit. Since Taiwan’s market opened up to cash day trading in 2014, trading volume has already accounted for nearly 40%, and the number of participants has been increasing year by year. Many people are drawn in mainly because they want to use intraday price fluctuations to quickly profit from the price spread.

But there’s a key point here—Taiwan stocks themselves follow a T+2 settlement system. How can you buy and sell on the same day? In fact, it’s done through margin trading and securities lending provided by brokers, allowing you to complete both the buy and sell on the same day. For example, if you buy TSMC at 9:15 a.m., you can sell it at 2:30 p.m.—you complete a full “buy-sell offset” within the day. For the broker, one buy and one sell can earn more commission; for you, it means same-day settlement.

Taiwan stock day trading mainly comes in two ways. Cash day trading is relatively straightforward: you use your own funds to buy and sell directly. You can operate it if your account has been open for at least 3 months and you have made 10 or more trades in the past year. The cost is a securities transaction tax of 0.15% plus a handling fee of 0.1425%. Securities financing day trading means borrowing money or borrowing stock from the broker, and the cost is a bit higher—securities transaction tax of 0.3%, a handling fee of 0.1425%, plus an average borrowing interest rate of 0.08%.

How many times can you day trade the same stock in a day? In Taiwan’s market, there’s no clear limit. As long as you have sufficient funds during trading hours (from 9:00 a.m. to 1:30 p.m.), you can repeatedly trade. But you need to note a few practical limiting factors. First is capital—each buy and sell temporarily ties up your funds. Second, not all stocks can be day traded. The Taiwan Stock Exchange only allows certain eligible underlying securities (about 200 in total, mainly Taiwan 50 and Mid-Cap 100 constituent stocks) for day trading. Odd-lot trading is not available for day trading at all.

The easiest thing to overlook is trading costs. Suppose you trade 5 times in a day. The total cost per buy-and-sell round is about 0.29%, and over 5 times that becomes 1.45%. This means the stock must rise by a substantial amount to truly make a profit—many people’s gains are actually eaten up by handling fees and taxes.

What’s attractive about day trading? The biggest advantage is being able to close out and exit on the same day, quickly cutting losses without having to bear the risk of holding overnight. If your judgment is wrong, you don’t have to wait until the next day to sell—you can get out immediately. To a certain extent, day trading can be said to be “no-capital business”—you buy and sell to settle quickly, and cash turnover is fast.

But the risks aren’t small either. Many people are attracted by “no-capital day trading,” but they don’t realize that behind it is financial leverage, which magnifies risk. People who lack capital are often also the least capable of bearing risk. If your judgment is wrong or you can’t stop losses in time, you may face massive losses or even default. Another practical issue is that day trading requires watching the market for a long time—you have to pay attention to individual stocks, the broader market, order flow (chips), and even same-day news—so the work you need to do is much more than swing trading.

Besides cash day trading, there are other same-day buy and sell options in Taiwan’s market. Futures are naturally T+0, with very low transaction tax (2 per 100k) and cheap commissions (about 30 yuan), but they require margin of tens of thousands. Options have an even lower threshold: you can trade with just a few thousand yuan in option premium. The transaction tax is 1000th of 1, and the commission is only a few tens of yuan. Contracts for Difference (CFD) are the most flexible option: they basically have no account-opening threshold (a few dozen to a few hundred US dollars is enough). You can trade stocks, foreign exchange, gold, oil, and even virtual currencies, and you only pay a spread.

Stocks can be bought and sold on the same day, but not everyone is suited for it. If you’re a short-term investor who likes using volatility to make quick profits, or you don’t want to bear overnight risk, day trading may fit you. But the premise is that you have sufficient capital, good risk-control ability, and the energy to watch the market for a long time. The cost of making the wrong call is high, and if you don’t have enough funds for settlement, you may also face default. So before you decide to day trade, ask yourself first whether you’re really prepared.