Why do some stocks require full delivery? Don't fall into this trap in the Taiwan stock market!

What Are Full Delivery Stocks? Explained in One Sentence

In the Taiwanese stock market, full delivery stocks are stocks that require the buyer to pay the entire purchase amount upfront. Simply put, you cannot use margin or short selling to buy these stocks; you must pay in full at once. This system is usually applied when a listed company’s stock price plummets to the bottom (net asset value per share below 5 NT dollars) due to poor management, financial difficulties, or major violations.

Once a stock is labeled as “full delivery,” the risk level immediately increases. However, this is not a permanent punishment; if the company can turn things around, there is still a chance to return to regular stock status.

How Risky Are Full Delivery Stocks? You Must Know These Points

Companies designated as full delivery stocks are usually problematic, so the investment risk is relatively high. Main risks include:

High-Risk Targets: Being labeled as full delivery stock typically indicates the company is facing operational difficulties, financial black holes, or legal disputes—long-term hidden dangers.

High Volatility: Stocks with a net asset value around 5 NT dollars are prone to sharp fluctuations because the market speculates whether restrictions will be lifted. Especially when stocks switch from margin trading to full delivery, continuous limit-down days are common.

Liquidity Concerns: Full delivery stocks only trade once every 30 minutes, often facing no buyers or sellers, leading to skyrocketing transaction costs.

No Dividends or Rights Issues: Holding these stocks means no dividends or rights issues, and the only hope is waiting for them to revert to regular stocks.

How to Check the List of Full Delivery Stocks?

To find out which stocks are full delivery stocks, visit the official website of the Taiwan Stock Exchange, click on “Trading Information” → “Trading Changes,” and you will see the full list.

How to Buy and Sell Full Delivery Stocks? The Trading Process Is Completely Different

Since full delivery stocks cannot be margin traded, their trading methods differ greatly from regular stocks.

Buying Process: Investors must transfer the full amount (including fees) to the broker’s designated delivery account, then notify the broker of the stock code and quantity they want to buy. To avoid order failures due to insufficient funds, usually extra money is transferred. On the same afternoon by 3:30 PM, if there is remaining balance, it will be automatically refunded to the individual account.

Selling Process: To sell full delivery stocks, you need to call your broker or apply via the app for “stock reservation” (pre-deposit). The broker will record a voice memo, after which you can place a sell order yourself. If the stock does not sell on the same day, you need to re-reserve it the next day, which is somewhat cumbersome.

Is There a Chance for Full Delivery Stocks to Turn Around?

Stocks that have been sidelined are not permanently delisted. As long as the company improves its operations, it can escape the fate of full delivery.

For listed companies: If the net asset value per share exceeds 5 NT dollars for two consecutive quarters, and shareholder equity each quarter exceeds 300 million NT dollars.

For OTC companies: If in any quarter the financial report shows a net asset value per share over 5 NT dollars and shareholder equity has increased.

Once the conditions are met, the Taiwan Stock Exchange will review on the first working day after receiving the quarterly reports. After the review announcement, it takes 2 days to officially take effect, and the stock can then resume normal trading.

Before Investing in Full Delivery Stocks, Ask Yourself These Questions

The existence of full delivery stocks itself is a warning sign of risk. Unless you have full confidence in the company’s turnaround prospects, it’s best to stay away from these stocks. Before trading, make sure you understand the cumbersome delivery process, the lack of liquidity, and the potential for consecutive limit-down days during holding periods. Remember, caution is the best policy for long-term safety.