you are talking about the margin rates? Why do I have to incur 2-3% for day trading?
Japanese daytrading for foreigners
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you are talking about the margin rates? Why do I have to incur 2-3% for day trading?
The interest rate for borrowing the shares is 2 to 3% p.a. So for 1 day it's just a few yen. But if the trade is over 3 million yen, the interest is waived by some brokers.
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I would say I am reasonably familiar with Japan equity market and that it is day-tradeable, liquidity-wise/cost-wise. I am looking for cash equity markets that can be day-traded (position lasting minutes, target PL 4-10 bps each trade which consists of multiple stocks), so cost is of paramount importance. I have so far only been able to identify US, Canada (too small), and Japan from the cost angle, I see London, Hong Kong charging stamps, Australia/Europe commission rates (IB or local brokers) both too high (5bps+). Which low cost (all-in <3bps)/high liquidity markets can you advise?
Well US above all else due to no short sell restrictions, very good lending books and no stamp. For all else you need to accept the cost if doing business. For sure Japan is not a great market to day trade stocks. I cannot disagree more with the other poster and i think you can already see from his posts that the retail platforms he is proposing take on costs here and there hence its anything but zero cost transaction costs. You should never be charged lending rates when you day trade it just does not make the slightest sense. Shirt sell restrictions in Japan are a series issue, so serious that many professional desks manage a stat arb book in order to be able to long sell intraday. You should seriously consider to run a bespoke stat arb strategy if you want to buy and sell Japanese stocks intraday on a serious scale.
Sorry, but how does a stat arb strategy help with short selling?
About HK stamp duty, it s good to know that it has been waved for most ETFs there, including the very liquid index tracker fund, ticker 2800. commission is still high to daytrade though
I'm not that familiar with other markets, but isn't the margin requirement 50% in most markets? If so, Japan's 30% requirement would make it just that much more attractive, wouldn't it?
A statarb book makes you hold long cash equity and short the hedge. Hence during the day you can long sell and buy back before end of day. Synthetically you now run two strategies, pnl wise, one long seat are book, and your intraday trading strategy.
If you can't short a stock, you can't short a stock.
That is nonsense. If you hold a long position you can sell the stock long and are not subject to short sell restrictions. Holding long positions as one side of a stat arb book and flipping the shares intraday is the bread and butter of any previous and possibly still existing cash equity prop desk in banks within markets with short sell restrictions...