How to short Japan?

[heavenskrow]

I don't get why you would want any another instrument given that the futures will provide you almost 17 hour a day access to your orders and not be as prone to gap and rebalancing risk as an ETF would be.

Margin requirement overnight and the tick size in terms of movement, so 5 points/1 tick is ~ $30 move similar to /ZB. If my entry is not close to perfect, I would get stopped out too fast. Or I am sleeping and overnight something happens in which I am not monitoring what happens to my stop.
Whereas with a Nikkei 225 put, my maximum risk is set in stone, and even if I lose the premium, I am fine because I believe in the trade that much.

Sadface, Nikkei down 2% already overnight.

 

[eurusdzn]

How about a put on DXJ ?

Yen and EWJ has strong -corr over most time periods.

Daily net of short DXJ = -(EWJ - FXY)

Might as well pick the long Yen for free if you are going to use an Etf.
Nice crisis/stress play.

 

[i960]

Margin requirement overnight and the tick size in terms of movement, so 5 points/1 tick is ~ $30 move similar to /ZB. If my entry is not close to perfect, I would get stopped out too fast. Or I am sleeping and overnight something happens in which I am not monitoring what happens to my stop.
Whereas with a Nikkei 225 put, my maximum risk is set in stone, and even if I lose the premium, I am fine because I believe in the trade that much.

Sadface, Nikkei down 2% already overnight.

Nah, N225M on Osaka man. 500 yen/4USD per tick, 1150USD margin/contract. This is the most liquid Nikkei contract in the world.

http://www.jpx.co.jp/english/derivatives/products/domestic/225mini/01.html

Sure you can use an option but you could also choose to enter at a significant level on the actual futures contract that you expect to be rejected. You can also trade options directly on the N225 index. Alternatively you can trade futures options on SGXNK which is a mid-size Nikkei contract on SGX.

The point is, you have a broker who offers you the most direct ability to trade this - trading it through an ETF is just obfuscated.

(edit: to correct for the fact that IB indeed does offer options on N225, the index itself)

 

[heavenskrow]

Nah, N225M on Osaka man. 500 yen/4USD per tick, 1150USD margin/contract. This is the most liquid Nikkei contract in the world.

http://www.jpx.co.jp/english/derivatives/products/domestic/225mini/01.html

Sure you can use an option but you could also choose to enter at a significant level on the actual futures contract that you expect to be rejected. You can also trade options directly on the N225 index. Alternatively you can trade futures options on SGXNK which is a mid-size Nikkei contract on SGX.

The point is, you have a broker who offers you the most direct ability to trade this - trading it through an ETF is just obfuscated.

(edit: to correct for the fact that IB indeed does offer options on N225, the index itself)

Awesome!!!! Thank you so much for this. Dang I wish I knew about this before. This beats the /NKD in terms of margin requirement and also ETF's in terms of liquidity. I do agree that trading through an ETF is obfuscated. I guess I will have to do the same thing for China's indexes.

Only downside is ThinkorSwim doesn't have N225/Hangseng/Shanghai futures to chart, so i will be basing my trades off /NKD chart and executing through IB.

Thank you a lot sir!

 

[i960]

Awesome!!!! Thank you so much for this. Dang I wish I knew about this before. This beats the /NKD in terms of margin requirement and also ETF's in terms of liquidity. I do agree that trading through an ETF is obfuscated. I guess I will have to do the same thing for China's indexes.

As a non-Chinese citizen you cannot trade Chinese indexes directly. However you can trade the A50 futures on SGX (2.5USD/tick, 2000USD margin). This is what I do and anyone else does who trades China from outside of China. There are a couple of ETFs available from the Hong Kong/Shangai link but I just trade the SGX futures directly - as presently they're very liquid.

Only downside is ThinkorSwim doesn't have N225/Hangseng/Shanghai futures to chart, so i will be basing my trades off /NKD chart and executing through IB.

Thank you a lot sir!

No problem. Just remember that your Nikkei trades will have resultant profits and losses in JPY. You must go to the account screen, right click on the balance, and choose "convert currencies to base currency" to convert the balance back to USD. You only need to do this when you actually want the USD for other things, for continual trading of it you don't need to keep converting all the time. Also, at small size there's no need to hedge currency risk, especially with USDJPY.