Recently, a friend asked me whether stocks can be bought and sold on the same day—essentially what people commonly call intraday trading, or T+0 trading. Taiwan’s stock market originally follows a T+2 settlement system. However, through margin trading and securities lending, investors can indeed buy and sell stocks on the same day, completing the settlement that day.

Put simply, intraday trading uses the margin trading and securities lending limits provided by the brokerage to quickly buy and sell within the same day, earning profit from the price spread in between. In my own understanding, for example, if you buy TSMC at 9:15 AM this morning and sell it at 2:30 PM, everything is completed on the same day—you don’t have to wait until the next day. This approach is attractive to some people because it helps avoid the risk of holding positions overnight.

However, you need to note that not all stocks are eligible for intraday trading. Currently in Taiwan, only the constituent stocks of the Taiwan 50 Index and the Mid-Cap 100 Index, plus the constituent stocks of the TPEx 50 Index (about 200 stocks in total), qualify as intraday trading targets. Odd lots are completely not allowed.

Intraday trading has been open to the Taiwan stock market for some time now. It’s said that nearly 40% of trading volume in the Taiwan market currently comes from intraday trading, and the number of participants has been steadily increasing. There are mainly two types of methods: cash intraday trading and margin (securities lending) intraday trading.

Cash intraday trading is relatively straightforward: you use your own money to buy and sell on the same day. Margin (securities lending) intraday trading, on the other hand, borrows money or stocks from the broker, with higher leverage. The account-opening requirements for both methods are basically the same: you must have opened the account for at least 3 months and have made more than 10 trades in the past year. Margin (securities lending) intraday trading also requires a trading amount of 250,000 or more, and you must set up a credit account.

When it comes to costs, the commission rate for cash intraday trading is 0.1425%, and the securities transaction tax is 0.15%. For margin (securities lending) intraday trading, the commission fee is the same, but the securities transaction tax is 0.3%, and you also have to add average borrowing interest of 0.08%. At first glance, they seem similar. But if you trade 5 times in a day, the costs add up to about 1.45%. This means your stocks need a significant price increase to truly make a profit; otherwise, your gains will be eaten up by fees.

As for the advantages, the biggest benefit of intraday trading is that positions are closed within the same day, so you don’t have to worry about any surprises at the next day’s market open. If your judgment is wrong, you can immediately close your position to cut losses—unlike ordinary trading where you have to wait until the next day. To some extent, it can be said to be like a “no-capital business,” because after the buy and sell are settled, the funds quickly return to you, without tying up capital for too long.

But risks should not be underestimated. The most common problem is investors using leverage beyond their own capability. If you get the direction wrong, you may not be able to stop the loss in time. If you get the direction right, leverage pressure may still cause you to take profit too early, and the result is often big losses and small gains. In addition, cash intraday trading requires watching the market for a long time, so you need to pay attention to individual stocks, the overall market, order flow, news, and more—your homework is far more than that of swing trading.

Actually, intraday trading isn’t limited to stocks. Futures, options, and CFDs are inherently T+0 instruments, so you can buy and sell within the same day. Futures have high leverage; you need tens of thousands in margin to trade, but transaction fees are very cheap. Options require only a few thousand in option premium, and their fees are also low. CFDs have the lowest barrier to entry: you can open an account with just tens of dollars up to a few hundred dollars, making them suitable for short-term trading and swing strategies.

Finally, what I want to say is that the stock “buy now, sell now” style is indeed attractive, especially for investors who want to avoid overnight risk. But the prerequisite is that you have enough capital, strong risk control ability, and the ability to stay focused on watching the market for a long time. If your capital is insufficient or your risk awareness is weak, it’s easy to end up with losses or even default. Therefore, before starting intraday trading, you must first assess whether this trading style truly fits you.