When does Monday's stock sale settle? A complete analysis of the US and Taiwan stock settlement systems

The Stock Settlement System Determines When Your Money Arrives

Many investors face the same dilemma: how long do you have to wait after selling stocks to withdraw your funds? The answer actually depends on the market and trading method you choose. Although both the US and Taiwan stock markets use a T+2 system, their operational logic and flexibility differ greatly. Especially for investors wanting to sell stocks on Monday, when the funds are credited involves multiple variables.

Taiwan Stock Market: Evolution from T+2 to T+0

Traditionally, Taiwan’s stock market adopts a “T+2” settlement system. For example, if you sell stocks on Monday, you must wait until Wednesday to receive the funds. This waiting period limits investors who pursue liquidity efficiency.

In May 2022, Taiwan’s Securities Exchange launched the “T+0” system, changing this situation. In theory, stocks sold on Monday can be credited on the same day. However, the key is that this system is essentially a process of borrowing from brokers—brokers advance the funds you would normally receive two days later, but you need to pay about 5% interest. Brokers offering this service include Fubon Securities, Yuanta Securities, etc., and investors must actively apply to enable it.

US Stock Settlement Rules and Account Types

The US stock market also uses a T+2 settlement system, shortened from T+3 in September 2017. But the flexibility lies in different account types offering different trading permissions.

Cash Accounts: Restrictions and Risks

Cash accounts require investors to trade with their own funds. If trading occurs before settlement is completed, the account will face a 90-day restriction.

Specific scenarios include: buying stocks for $100 on Monday, but due to price fluctuations, the actual transaction price is $120, and the account lacks sufficient funds. In this case, the investor must deposit an additional $20 within 5 business days; otherwise, they cannot sell the stock and will be restricted for 90 days.

Two ways to avoid this: pre-fund adequately or upgrade to a margin account.

Margin Accounts: Advantages

Margin accounts require a total asset value exceeding $25,000. Once this threshold is met, investors can break free from T+2 restrictions and perform unlimited intraday trading. These accounts support short selling, margin borrowing, options trading, and other advanced features, but require paying interest on the borrowed funds.

Differences in Fund Crediting Based on Investment Methods

US Broker vs. Taiwan Discretionary Trading

Buying US stocks directly through a US broker results in almost immediate fund arrival, maximizing trading efficiency. Using a Taiwan broker to place discretionary orders for US stocks is limited by broker rules—usually requiring deposits before 8 PM to complete same-day trading.

CFD: A Low-Barrier T+0 Option

For small investments seeking T+0 settlement, Contracts for Difference (CFD) offer an alternative. CFD traders speculate on price movements without owning the underlying asset, enabling two-way trading and high leverage. For example, with Tesla, a 10x leverage means buying 1 share costs just over $20.

Deposits and withdrawals via CFDs are credited on the same day. Many platforms (like Mitrade) do not charge withdrawal fees, making them suitable for investors aiming for high capital turnover.

Practical Recommendations: How to Choose the Best Option

Small Investors: If you cannot reach the $25,000 threshold, consider CFD trading for T+0 to avoid the 90-day restriction of cash accounts.

Moderate Capital Investors: Apply for T+0 in Taiwan; evaluate whether the 5% interest cost is worthwhile. In the US, prioritize upgrading to a margin account.

Large Investors: Margin accounts offer the highest flexibility, with relatively manageable interest costs, suitable for frequent traders.

Cross-Market Investors: Prefer US brokers over discretionary trading to ensure stocks sold on Monday are credited on the same day, avoiding time delays.

Overall, when your stocks are credited is not a fixed answer but depends on your chosen market, account type, and trading tools. Understanding how different systems operate allows you to maximize capital efficiency while controlling costs.