| ETF Q&A
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Q¡GWhat is the board lot of the ETF in TWSE?
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| A¡GThe board lot of ETF is the same as those of stocks and close-end funds, i.e. 1,000 units. It is also applicable to the regulation of block trading.¡C |
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Q ¡G Where can we trade the ETF?
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A¡GETF, like stocks, can be traded at any licensed securities broker¡C
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Q¡GHow do we trade the ETF?
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A¡GThe trading of the ETF is similar to that of the close-end fund. The ETF needs to be listed at TWSE. Trading and settlement of the ETF are the same as those of securities.
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Q¡GDo we need to open an extra account for trading the ETF?
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A¡GInvestors are able to trade the ETF by their securities trading accounts with a brokerage house, and do not need to open an extra account.
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Q¡GAre we able to trade the ETF in margin? |
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A ¡G Once the ETF is listed, it is available to be traded in margin. Short selling under margin trading is exempted from the local up- tick rule, which requires short sales to take place at no lower than the previous day's closing price. However, investors should check their brokers to see whether there is any quota available before conducting short selling.
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Q¡GWhat is the daily price up/down limit of the ETF?
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A ¡G The daily price up/down limit is 7% of the preceding business day's closing price, which is the same as that of the stocks.
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Q ¡G What is the bid/ask spread of the ETF?
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A ¡G The up/down ticks of the ETF are NT$ 0.01 if the price of the unit is below NT$ 50, and NT$ 0.05 if the price of the unit is above NT$ 50.
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Q¡GWhat is the cost of trading the ETF?
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A¡GThe cost of trading the ETF includes a general trading cost, i.e. commission and securities transaction tax. Commission of the ETF is the same as that of stocks. The fee varies according to different brokers but it is no higher than 0.1425% of the consideration. Securities transaction tax of the ETF is 0.1% levied on the sales of the units, lower than that of stocks, levied at 0.3%.
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