Complete Guide to Taiwan Stock Market Odd-Lot Trading Hours and Rules: How Small Investors Can Precisely Buy the Dip

Fractional share investing has become one of the most popular financial tools among retail investors in Taiwan. Unlike traditional full-share trading, which requires an initial investment of thousands of dollars, fractional trading uses individual shares as the unit of measurement, allowing investors with limited funds to participate in their preferred stocks. Since the opening of intraday fractional trading in October 2020, this flexible trading method has gradually changed the investment habits of small investors.

The Origin and Nature of Fractional Shares

How are fractional shares generated?

Holding less than 1000 shares (one lot) of a stock is considered a fractional share. These scattered shares usually originate from the following situations: unfilled portions of stock orders, fractional parts resulting from stock distributions by listed companies, or as a result of investors actively trading fractional shares. Because the minimum trading unit is 1 share, this opens a door for investors with small capital.

Why are fractional shares becoming more popular?

In the past, fractional trading was limited to after-hours, with trading hours and volume unable to meet the needs of many investors. With the introduction of intraday fractional trading mechanisms by the exchange in mid-2020, investors can now buy and sell fractional shares during regular trading hours, greatly enhancing trading flexibility and execution efficiency.

Detailed Schedule of Taiwan Stock Market Fractional Trading Hours

Taiwan stock fractional trading is divided into two sessions, each with different order types and matching rules:

Intraday Trading Session (9:00-13:30)

Investors can submit orders starting at 9:00 AM. The system performs the first match at 9:10, followed by a call auction every minute thereafter. During this period, only electronic orders are accepted; phone orders are not supported. Investors must submit orders via their broker’s trading app. Transactions follow the “price priority, time priority” principle. Note that unfilled orders during intraday trading are not automatically carried over to after-hours; investors need to resubmit.

After-hours Trading Session (13:40-14:30)

From 1:40 PM to 2:30 PM, investors can place orders electronically or via phone through their broker. The exchange performs a single call auction at 14:30, following the “price priority, random order at same price” rule. Unfilled orders after the session are automatically canceled and are not carried over to the next trading day.

Core Rights and Restrictions of Fractional Share Trading

Shareholder rights of fractional shareholders

Fractional shareholders enjoy the same rights as full-shareholders, including dividends and profit distributions. When companies pay cash dividends, fractional shareholders receive their proportional share; for stock dividends or stock splits, the fractional parts are converted into cash or sold collectively by the exchange, with proceeds distributed accordingly.

Regulations for fractional trading

Individual investors are limited to a maximum of 999 shares per order. To trade fractional shares, a minimum of NT$1000 is required to enter the market. Considering transaction costs, it is recommended that single trades amount to NT$10,000 or more for better efficiency. Fractional trading operates on a “one share per transaction” basis, with the minimum purchase being 1 share.

Overview of Costs in Fractional Trading

Commission calculation

The commission for fractional trading is the same as for full shares, at 0.1425% of the transaction amount. For example, purchasing 200 shares of TSMC (2330.TW, assuming a closing price of NT$1065):

Transaction amount = 200 × 1065 = NT$213,000
Commission = NT$213,000 × 0.1425% ≈ NT$303.53

Different brokers offer various discounts; some provide over 50% off for electronic orders, reducing the actual fee to around NT$151.77.

Major brokers’ fractional trading conditions

Major Taiwanese brokers show notable differences in their promotional offers. Fubon Securities and E.SUN Securities offer electronic order discounts between 18% and 20%, with minimum commissions of NT$1; KGI Securities offers a 40% discount but has stricter account opening requirements; Shin Kong Securities and Uni-President Securities offer discounts of 10% and 16.8%, respectively. Investors should choose brokers based on their trading frequency and needs.

Practical Trading Tips: How to Increase Execution Rates

Timing buy at limit-up prices, sell at limit-down prices

In after-hours fractional trading, since only one matching occurs, investors eager to buy a stock can try placing a buy order at the limit-up price. Under the maximum execution principle, this significantly increases the chance of successful purchase. Conversely, for selling, placing a sell order at the limit-down price maximizes the likelihood of a successful sale. This strategy is especially suitable for stocks with low trading volume.

Consolidate fractional shares into full shares to accelerate execution

For stocks with low liquidity, investors can consider buying additional fractional shares to round up their holdings to a full lot (1000 shares), then sell through the full-share market. For example, if you hold 700 shares of Shinjin (1582.TW) but find it difficult to sell during the day, you can buy 300 more shares to reach 1000, then sell via the more liquid full-share market, avoiding being stuck in the illiquid fractional market.

Combine intraday and after-hours trading

If your intraday order is not filled, you can reassess the stock’s price trend after hours and submit a new order. Additionally, by observing the fractional market data during the day, if you see large sell orders that remain unfilled, you can adjust your price strategy or change trading times to improve the chances of execution.

Advantages and Risks of Fractional Investing

Investment advantages: low barrier to entry

The biggest advantage of fractional trading is the low capital requirement—starting with NT$1000 allows you to experience stock market operations. This enables investors with limited financial resources to participate in the market while maintaining sufficient liquidity for daily expenses or other investments. Fractional shares are also suitable for dollar-cost averaging and long-term asset allocation, reducing psychological pressure from market fluctuations.

Investment risks: costs and liquidity challenges

The fractional market has significantly lower trading volume than the full-share market, leading to longer matching times and limited execution efficiency. Although the minimum commission is NT$1, trading small amounts results in a high percentage of transaction costs, which can cause losses. Additionally, brokers may lack sufficient inventory to fulfill large orders, and time constraints may prevent converting fractional shares into full shares.

An Alternative Beyond Fractional Trading

For investors concerned about high transaction costs or low liquidity in fractional trading, Contract for Difference (CFD) trading offers another option. CFDs require only a small margin deposit to trade stocks, without owning the actual shares. Costs are transparent and usually involve no commission. For example, buying 5 shares of Google with $400 would require $2000, but via CFDs with a 5% margin, only $100 is needed to establish the same position.

However, CFDs are more suitable for short-term traders, as holding overnight incurs overnight interest charges, which is opposite to the long-term holding nature of fractional shares.

Summary: Rational Investment for Small Investors

Taiwan’s fractional stock trading hours and rules have gradually improved, opening the door for small investors to access professional investing. Compared to full-share trading, fractional trading requires less capital and offers more flexible and diverse methods. However, success in fractional investing depends on solid knowledge and a rational mindset. Investors should first understand the actual costs of commissions and liquidity; second, learn basic technical and fundamental analysis; third, avoid blindly following trends, and develop a reasonable investment strategy based on their risk tolerance. Only with knowledge, skills, and discipline can small investors achieve steady profits in Taiwan’s fractional stock market.