Someone recently asked me how long it takes to get the money after selling stocks. This is actually a common issue many beginners encounter. To be honest, the settlement times for U.S. stocks differ quite a bit from those in Taiwan, and understanding these systems can significantly impact your investment efficiency.

Let's start with Taiwan stocks. In the past, Taiwan used a T+2 settlement system, meaning if you sell stocks on Monday, you won't receive the money until Wednesday. This can be a bit inconvenient for those who want quick capital turnover. However, in 2022, the Taiwan Stock Exchange introduced a T+0 system, allowing you to get the money on the same day you sell. Sounds great, right? But there's a catch: T+0 is actually a concept of borrowing money from the broker. The broker advances the funds to you, and you need to pay interest, usually around 5%. So, if you use T+0, you need to factor in the cost.

U.S. stock settlement times are also T+2, just like Taiwan stocks. Previously, it was T+3 until 2017, when it was changed to T+2. But U.S. stocks have a more complex aspect: the account type affects your trading flexibility.

If you open a cash account, there are more restrictions. You must wait until the funds are fully settled before making another trade. A common pitfall is buying stocks with unsettled funds and then selling before settlement, or buying and selling on the same day, which can lead to a 90-day account restriction—quite serious. For example, if your account has only $100, and you place an order for a stock that suddenly surges to a $120 purchase price, your cash isn't enough, and the stock isn't fully paid for. You’ll need to deposit an additional $20 within five business days, or you'll face restrictions.

To avoid this, a simple method is to deposit more money before trading to ensure sufficient funds. Another approach is to open a margin account, which offers much more flexibility.

Margin accounts are different. As long as your total assets exceed $25,000, you can generally bypass the T+2 restrictions and buy or sell freely. These accounts also allow short selling, margin trading, options trading, and more, offering much higher flexibility. The downside is that opening such an account usually requires at least $2,000, and margin trading incurs interest costs.

If you want to invest small amounts and experience T+0 trading, Contract for Difference (CFD) is an option. CFDs have a much lower entry barrier and are inherently T+0, so you can buy and sell on the same day without issues. They trade on price differences rather than actual stock ownership, and you can trade both ways with leverage, up to 200 times. Besides stocks, CFDs also cover indices, forex, gold, oil, cryptocurrencies, and more. Deposits and withdrawals are usually processed on the same day.

By the way, if you want to buy U.S. stocks and deposit money, can it be available the same day? Yes. If you deposit through a U.S. stock broker, the funds are almost instant. But if you deposit via a Taiwan broker through a cross-trading arrangement, it depends on each broker’s rules—generally, deposits made before 8 p.m. can be available for trading the same day.

In summary, understanding the settlement times for U.S. stocks and the rules of various account types can greatly help your trading plans. Different investment methods and account types suit different people. Choose based on your capital size and trading habits.