When encountering disposal stocks, should you sell or hold? Understand this stock market "forbidden zone" in 5 minutes

A stock skyrocketing / surging 100% in the short term may seem like a good thing, but when you actually place an order, you find yourself stuck—only matched once every 5 minutes, with margin trading also frozen, and full payment required. At this point, you might have already fallen into the trap of disposal stocks.

So, what exactly are disposal stocks? Why are there so many restrictions? Most importantly—how many days will a disposal stock be disposed of, and can it still rise after the restriction is lifted? These questions are worth understanding thoroughly.

A Quick Comparison: Normal Stocks vs Disposal Stocks

Simply put, disposal stocks are a “isolation measure” by the Taiwan Stock Exchange for abnormal trading stocks. Sharp short-term rises or falls, explosive turnover rates, abnormal trading volume—if any of these conditions are met, the stock will first be placed on the “Attention Stock” list, and may later be upgraded to “Disposal Stock.”

How strict are the trading restrictions after the upgrade? Let’s compare directly:

This is why investors jokingly refer to disposal stocks as “prison” or “locked up.”

How many days does a disposal stock take to be解除？Stage-by-stage overview

First disposal (most common)

• Matching interval: once every 5 minutes
• Restrictions: single order over 10 lots or cumulative over 30 lots must be circle traded
• Duration: usually 10 business days

Second disposal (additional restrictions)

• Matching interval: once every 20 minutes
• Restrictions: all trades must use circle deposit, regardless of buy/sell quantity
• Duration: also 10 business days (but if intraday loss ratio exceeds 60%, extended to 12 business days)

For example, in December 2023, stocks like Evergrande, Lishan, Hongguang, and 7 others were simultaneously listed as disposal stocks, forcing investors to hit pause.

Will disposal stocks rise again? Case studies

Story A: V.F. Electronic (6756)

Entered first disposal in June 2021, remained hot, then upgraded to second disposal, yet the stock price unexpectedly accumulated a 24% rise. Stable chips actually became an advantage.

Story B: Yang Ming (2609)

In the same period, due to large gains and high turnover, it was listed as a disposal stock. In July, due to “large cumulative decline over the past 6 days,” it was re-listed as a disposal, then remained sluggish for a long time.

The contrast between these two cases is clear: the fate of disposal stocks entirely depends on their fundamentals.

Should you buy? How to judge

Risk signals

• Sharp decline during disposal period → avoid decisively
• Company has operational issues → don’t touch
• Overall market downturn → wait and see

Buying opportunities

• Stock price consolidates during disposal → consider
• Company fundamentals are solid → suitable for long-term investors
• Valuation is obviously undervalued → consider early positioning

The key is doing your homework: check financial reports, analyze chips, assess company competitiveness—don’t get blinded by stock price volatility.

During the disposal period, it’s actually a good time to observe main capital movements—since margin trading is prohibited, capital inflows and outflows are especially clear, and institutional buying and selling intentions are transparent.

Is holding disposal stocks long-term worthwhile?

It depends on who you are:

Short-term traders: Disposal stocks can’t be day-traded, trading is slow, costs increase significantly, not recommended.

Long-term investors: Delays in matching and trading restrictions have little impact; instead, they can force you to review the latest financial reports and stay updated on company developments. If you believe in the company’s prospects, the disposal status at that moment doesn’t matter much.

Investors with low risk tolerance: Disposal stocks are volatile and risky; stick to a stable portfolio.

Final reminder

Disposal stocks are merely a “trading abnormality alert” from regulators, not a judgment on a company’s quality. Being listed as a disposal stock might just be driven by short-term hot money, or it could be a prelude to a genuine valuation re-evaluation.

The key is to evaluate using normal valuation frameworks: How is the company’s competitiveness? What is the trend of its financial performance? Where is its future growth potential? Don’t be scared off by the disposal stock label or blinded by volatility.

How many days a disposal stock takes to解除 isn’t the main point; what’s important is what it becomes after the解除—this depends on your understanding of the underlying company.