What is settlement default?Settlement Default

When there isn't enough money in the settlement account to pay for shares on settlement day. It leaves a default record, you're pursued for the amount and a penalty, you may lose your trading privileges, and serious cases can be criminal.

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Taiwan Stock Rules
Day Trading and the Halved Transaction Tax
A stock day trade means buying and selling the same stock on the same day and settling only the difference; the transaction tax is halved to 0.15%, but you still have to account for commission and the risk of not being able to sell.
Taiwan Stock Rules
T+2 Settlement and Settlement Default
Taiwan trades settle on the 2nd business day after the trade: the money for a purchase must be in your settlement account by then, and falling short is a settlement default with serious consequences.

Related terms

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Go to “Day Trading and the Halved Transaction Tax”