Intraday odd-lot trading is scheduled to start in line with standard block trading from early December as part of the Taiwan Stock Exchange’s (TWSE) efforts to optimize the local intraday odd-lot trading mechanism, the exchange announced on Thursday.
Execution of intraday odd-lot trading is to begin at 9am every trading session from Dec. 7, 10 minutes earlier than the current trading time, while brokerages would start to take orders from investors for odd-lot trading at 8:30am, 30 minutes earlier than the current schedule, also in line with standard block trading, the TWSE said.
The change aims to improve convenience for investors and improve overall market efficiency, the TWSE said.
Photo: CNA
Odd-lot trading allows purchases of fewer than the standard lot of 1,000 shares and makes high-priced stocks more accessible to retail investors.
For example, 1,000 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares would cost NT$2.41 million (US$75,672) based on yesterday’s closing price, but odd-lot trading allows investors to spend NT$2,410 to buy one TSMC share to have a stake in the world’s largest contract chipmaker.
To support the new arrangement, the TWSE said it would introduce pre-market information disclosure and delayed opening mechanisms for odd-lot trading to maintain transparent price discovery and orderly markets.
Opening prices and actual opening times for the same stock might differ between odd-lot trading and standard block trading, as they operate in two independent trading mechanisms, the exchange said.
The exchange would continue to review intraday odd-lot trading to further improve the trading mechanism so as to balance price discovery and stabilize market operations, and eventually promote the development of Taiwan’s capital market and enhance trading quality for investors, it said.
In early June, President William Lai (賴清德) said that the government aims to transform Taiwan’s capital market into an Asian equivalent of the tech-heavy NASDAQ market for start-ups from around the world.
Lai said that the government’s efforts include relaxing rules on odd-lot trading and day trading, which allows traders to buy and sell, or sell and buy, the same shares in a single session.