T+2 Settlement and Buying with a Partial Deposit

T+2 settlement, can sell the same day

Korean stocks complete settlement on the 2nd business day after the trade; shares bought can be sold the same day (T+0 trading), but sale money can only be withdrawn after settlement.

Pay only part to place the order

Many brokers take an order deposit ratio: at 40%, for example, buying ₩1,000,000 of stock only needs ₩400,000 in the account when you order, and the remaining ₩600,000 has to be paid before the settlement date.

Don't pay, and your shares get force-sold

Money still owed on the settlement date becomes an unpaid balance (misugeum), and the broker will force-sell your shares to recover it; for a while afterwards you may have to pay in full before buying stocks. Ratios, timing and restrictions follow your broker's rules.

Key takeaways

• Settlement completes on the 2nd business day after the trade (T+2); shares bought can be sold the same day.
• Many brokers let you place an order with only part of the money, based on an order deposit ratio (jeunggeogeum, for example 40%), and the rest must be paid before T+2 settlement.
• If it isn't paid by settlement day, the debt becomes an unpaid balance (misugeum), the broker force-sells shares to recover it (bandae-maemae), and for a while you may have to pay in full before buying.
• Deposit ratios, forced-sale timing and account restrictions are set by brokers; buying with a partial deposit magnifies risk, so beginners are better off paying in full.

Try it yourself

You can do these exercises in this lesson's interactive simulation:

1. Choose “Pay in full (100%)”, buy on Wednesday and press ▶: on which day does settlement complete? Is there a weekend in between?
2. Switch to “40% deposit (illustrative)”: how much did you pay up front? How much more is due, and by which day?
3. Choose “Not paid” and play: on which day are the shares force-sold?
4. Switch to “Sell”: on which day can you withdraw the sale money?

Quiz and explanations

1. You buy Korean stock on Monday. When does it settle?

Answer: Wednesday.Korean stocks settle T+2: trade on Monday, settle on the 2nd business day, Wednesday.

2. With a 40% deposit ratio, you buy ₩1,000,000 of stock. How much must be in your account when you order?

Answer: ₩400,000.1,000,000 × 40% = ₩400,000; the remaining ₩600,000 must be paid before the settlement date.

3. What usually happens if the balance still isn't paid at T+2?

Answer: It becomes an unpaid balance, the broker force-sells shares to recover it, and the account may be restricted for a while.An unpaid balance (misugeum) leads to a forced sale (bandae-maemae); exact timing and restrictions follow your broker's rules.

Terms in this lesson

• forced sale (bandae-maemae) (Forced Sale): When an investor doesn't pay the balance or collateral on time, the broker sells the shares to recover the debt, usually at the market price or even a very low price.
• order deposit ratio (Order Deposit Ratio): The share of the purchase amount a Korean broker requires in your account when you place a buy order (for example 40%); the rest must be paid before T+2 settlement. Brokers set the ratio by the stock's grade.
• settlement (Settlement): The step after a trade where cash and shares formally change hands; different markets take different numbers of trading days (US stocks T+1, Hong Kong T+2).
• T+0: Shares bought today can be sold the same day. Hong Kong, US, Japanese and Korean stocks all allow it; ordinary A-shares don't, only some ETFs and similar products do.
• unpaid balance (misugeum) (Unpaid Balance): Money still owed on shares bought with a partial deposit and not paid by the T+2 settlement date. The broker will force-sell shares to recover it and may restrict the account for a while.