## Can you buy and sell odd lots on the same day? The truth about day trading and a guide to operations

Many investors want to know if odd lots can be completed within the same day. The answer is straightforward: **No**. Whether during or after trading hours, odd lots do not have credit trading functions enabled, and the earliest they can be sold is the next day. This is also why many investors turn to other day trading methods.

### What is T+0 day trading?

**Day trading (day trading)** refers to buying and selling within the same trading day to profit from the price difference. Taiwan's stock market originally adopted a T+2 settlement system (buy today, settle two days later), but investors can use margin trading and short selling services provided by brokers to close positions within the same day, achieving T+0 effects.

For example, if you buy Taiwan Semiconductor Manufacturing Company (TSMC) stock at 9:15 AM and sell it at 2:30 PM, you don't have to wait until the next day. This trading method requires sharp judgment and high alertness because of market volatility and higher risks.

### The two main types of day trading

#### Spot Day Trading
This involves using your own funds for same-day trading, including:
- **Long position**: Buying stocks during the day when expecting prices to rise, then selling within the same day
- **Short position**: Selling stocks during the day when expecting prices to fall, then buying back within the same day

Account opening requirements:
1. Broker account open for at least 3 months
2. More than 10 transactions in the past year
3. Signed risk disclosure statement

Cost:
- Stamp tax: 0.15%
- Commission: 0.1425%

#### Margin and short selling day trading
Using broker margin financing and short selling (borrowing money or stocks) to conduct day trading. The operations include:
- **Margin long**: Borrow money to buy and short sell stocks simultaneously
- **Margin short**: Short sell stocks and borrow funds to buy

Account opening requirements:
1. Broker account open for at least 3 months
2. More than 10 transactions in the past year
3. Transaction amount over NT$250,000 in the past year
4. Need to open a margin account

Cost:
- Stamp tax: 0.3%
- Commission: 0.1425%
- Loan interest rate (average): 0.08%

### Other financial products suitable for same-day trading

Besides stock day trading, futures, options, and Contracts for Difference (CFD) inherently support T+0 trading without needing broker margin services:

**Futures Trading**
- Naturally T+0, can buy and sell on the same day
- Margin requirement: usually NT$100,000+
- Trading tax: 0.02% of the transaction
- Commission: about NT$30

**Options Trading**
- Naturally T+0
- Lower threshold: only a small premium (a few thousand NT$)
- Trading tax: 0.1%
- Commission: about NT$10+

**CFD (Contracts for Difference)**
- Naturally T+0
- Minimum opening deposit: tens to hundreds of dollars
- Costs: spread on the underlying asset
- Advantages: can trade forex, gold, stock indices, individual stocks, oil, Bitcoin, and more

### Pros and cons of day trading

**Main advantages:**
- Can close positions within the same day, no overnight holding needed
- Avoid overnight risk; can cut losses immediately if market moves unfavorably
- Reduce uncertainty from overnight risks
- To some extent, enables low-cost trading

**Main risks and disadvantages:**
- **Leverage risk**: Many investors overuse leverage, and if the market moves against them, losses can be huge
- **Difficulty in setting take-profit and stop-loss**: Correctly judging when to take profits or cut losses is challenging under leverage pressure
- **Cost erosion**: High-frequency trading costs, taxes, and fees can eat into profits
- **Time-consuming and labor-intensive**: Requires monitoring the market all day, paying attention to intraday trends, order flow, news, etc., much more demanding than swing trading

### Which stocks can be day traded?

Currently, the Taiwan stock market allows day trading on:
- Taiwan 50 Index component stocks
- Mid-cap 100 Index component stocks
- GreTai 50 Index component stocks
- Approximately 200 stocks in total

In the US stock market, a regular account is limited to 3 trades within five business days unless the account balance exceeds $25,000. If below $25,000, stock trading will be frozen for 90 days.

### Best timing for day trading

Day trading is usually performed over short periods, most suitable during:
- **Market open**: high activity and volatility
- **Market close**: active trading, easier to exit positions
- **Major news releases**: event-driven price movements

### Is day trading suitable for everyone?

Day trading is suitable for short-term investors, especially those who want to profit quickly from market volatility or avoid overnight risk. However, this trading style requires investors to have:
- Strong market judgment
- Good risk management skills
- Sufficient time for intraday monitoring
- Adequate capital to handle leverage trading

If your judgment is limited or your risk tolerance is low, day trading can lead to significant losses or even margin calls and default. It is recommended to first practice with simulated trading to familiarize yourself with the process and assess your capabilities before real trading.