Japan’s Monex to enable clients to make short trades

Japanese online trading company Monex, Inc, a part of Monex Group, Inc. (TYO:8698), is expanding the offering to its clients. Today, the brokerage unveils its plans to enable its clients to make short trades with an indefinite repayment period as a part of the company’s general margin trading services. The provision of this service is set to start on March 23, 2019.

Thus far, Monex, Inc. has only offered long trades so far as part of its general margin trading (indefinite period), but the company has decided to offer short trading in response to requests from customers. In addition, Monex, Inc. will offer a stock lending rate of 1.50% for a period of six months from the start of the services until trades that are delivered on Friday, September 27.

Under the system margin trading terms, the repayment period is set for a maximum of six months, but short trades under the general margin trading scheme do not have such a repayment period. Therefore, investors are able to trade without worrying about their open positions being forced into settlement because of the repayment period.

The system margin trading terms sometimes generates additional costs, called “negative interest per diem,” when there are increased needs for short trading as a result of news headlines and earnings announcements. The general margin trading, however, does not generate negative interest per diem because investors lend stocks without using securities finance companies. Investors do not need to worry about additional costs to hold stocks for longer-term or to necessitate hedge selling.

At the start of the new service, which is currently planned to be implemented the evening of Saturday, March 23, 2019, approximately 280 stocks will be available for short trades.

The broker warns investors that it may make forced repayment of the short trade open positions held by investors after the next business day for reasons attributable to the company.