Trading Rules for IBSJ Products

Trading Rules for IBSJ Products

Precautions for Trading Japanese Stocks

Trading stocks on net cash settlement balance is prohibited by law.


Buying and selling the same symbol on the same day (same settlement date)

It is possible to buy an issue and then sell it on the same settlement date, or to sell an issue you own and then buy it again on the same settlement date.

However, "buy → sell → buy" or "sell → buy → sell" of the same stock with the same funds on the same settlement date may not be accepted as it is considered to be a transaction on net cash balance. (The sale of existing positions in the same stock and a day trade of the same stock for the same settlement date may also be considered as a transaction on net cash settlement.) Trades such as "Stock A BUY → Stock A SELL → Stock B BUY → Stock B SELL → Stock C BUY → Stock C SELL" are available even if they are traded for the same settlement date (on the same trade date) with the same funds. The following is an example of a case where an order cannot be placed as it is considered to be a transaction on net cash settlement balance.


Transaction Example 1

Stocks held prior to trade: None
Funds in the account: 1M JPY

Trade Date Trade Settlement Date Stock Trade Price (JPY) Number of Shares Proceeds (JPY) Available for Trading (JPY)
3/1 BUY 3/4 Stock A 1,000 1,000 1M 1M
3/1 SELL 3/4 Stock A 1,000 1,000 1M  
3/1 BUY 3/4 Stock A 1,000 1,000 1M 1M
The last purchase order above is not available.

1M JPY in the account will be applied to the purchase of Stock A. Since Stock A is a Day-Trading, the proceeds from its sale cannot be applied to the 2nd purchase of the same issue on the same day. However, this is possible if the amount of funds in the account were originally 2M yen or more.



Transaction Example 2

Stocks held prior to trade: Stock A,1,000 stock
Funds in the account: none

Trade Date Trade Settlement Date Stock Trade Price (JPY) Number of Shares Proceeds (JPY) Available for Trading (JPY)
3/1 SELL 3/4 Stock A 1,000 1,000 1M 1M
3/1 BUY 3/4 Stock A 1,000 1,000 1M  
3/1 SELL 3/4 Stock A 1,000 1,000 1M 1M
The last sell order described above will not be accepted.

If you had settled cash in the amount of more than 1,000,000 yen or more than 1000 shares of Stock A prior to the 2nd sell order, it will not be considered as a transaction on net cash settlement balance.



Transaction Example 3

Stocks held prior to trade: None
Funds in the account: 1M JPY

Trade Date Trade Settlement Date Stock Trade Price (JPY) Number of Shares Proceeds (JPY) Available for Trading (JPY)
3/1 BUY 3/4 Stock A 1,000 1,000 1M  
3/1 SELL 3/4 Stock A 1,000 1,000 1M 1M
3/1 BUY 3/4 Stock A 1,000 1,000 1M  
The last buy order described above is allowed.

Round trip trades for different issues "Buy A, sell A, buy B, sell B, buy C, sell C..." for the same settlement date (on the same trade day) is allowed.

Japan Stock CFDs

We may not be able to accept short sale orders due to the inventory status of the underlying stocks at our covering broker. In addition, short sale orders may take longer to execute if the uptick rule applies to an underlying stock, regardless of whether the underlying stock is subject to short sale price restrictions. Please note the Tokyo Stock Exchange short selling restriction “Short sale on margin by individuals (up to 50 trading units)” will not be applied. The stock lending fee displayed in TWS is for reference only. Actual stock borrowing fees incurred on the settlement date may be greater than that shown on TWS, depending upon market conditions and demand.

If you wish to execute at the opening price and the closing price

For an execution at the opening price, please use Order Type : LMT (Limit) + Time in Force: OPG (Opening) order and for an execution at the closing price, LOC (Limit-on-Close) order. LMT (limit order) and MKT (market order) are not available for both cases. You need to set a lower limit price for selling and a higher limit price for buying than the expected opening or closing price. (The limit price must be within the price range set by the underlying market. Please note that any executions at the opening price and the closing price are not guaranteed.

Basic Order Types and Time in Force


The following are the typical order types available for each of our products.

Products Basic Order Types Time in Force
Futures, Options, Future Options MKT, LMT, STP, STPLMT, MOC, LOC DAY, GTC, IOC, GTD, DTC
Stocks/Stock CFD MKT, LMT, STP, STPLMT, MOC, LOC DAY, GTC, OPG, GTD, DTC
SGX, GLOBEX
JPY denominated Futures and Future Options
MKT, LMT, STP, STPLMT DAY, GTC, IOC, GTD, DTC




Basic Order Types

MKT|Market Order

(A Market order is an order to buy or sell at the market bid or offer price. A market order may increase the likelihood of a fill and the speed of execution, but unlike the Limit order a Market order provides no price protection and may fill at a price far lower/higher than the current displayed bid/ask.)

LMT|Limit Order

(A Limit order is an order to buy or sell at a specified price or better. The Limit order ensures that if the order fills, it will not fill at a price less favorable than your limit price, but it does not guarantee a fill.)

STP|Stop Order

(A Stop order is an instruction to submit a buy or sell market order if and when the user-specified stop trigger price is attained or penetrated. A Stop order is not guaranteed a specific execution price and may execute significantly away from its stop price. A Sell Stop order is always placed below the current market price and is typically used to limit a loss or protect a profit on a long stock position. A Buy Stop order is always placed above the current market price. It is typically used to limit a loss or help protect a profit on a short sale.)

STPLMT|Stop-Limit Order

(A Stop-Limit order is an instruction to submit a buy or sell limit order when the user-specified stop trigger price is attained or penetrated. The order has two basic components: the stop price and the limit price. When a trade has occurred at or through the stop price, the order becomes executable and enters the market as a limit order, which is an order to buy or sell at a specified price or better. A Stop-Limit eliminates the price risk associated with a stop order where the execution price cannot be guaranteed, but exposes the investor to the risk that the order may never fill even if the stop price is reached. The investor could "miss the market" altogether.)

MOC|Market-on-Close

(A Market-on-Close (MOC) order is a market order that is submitted to execute as close to the closing price as possible.)

LOC|Limit-on-Close

(A Limit-on-Close (LOC) order will be submitted at the close and will execute if the closing price is at or better than the submitted limit price.)




Time in Force

DAY

An order that uses DAY time in force will continue to work until the order fills or be canceled at end of the trade day session.

GTC|Good-til-Cancel

An order that uses the Good-Til-Canceled (GTC) time in force will continue to work until the order fills or is canceled . The ability to enter a bid well below the prevailing trading price for most asset classes, or an offer higher than its current level, allows an investor to place a resting order for days, weeks or months in advance without having to repeat the process each day. The GTC order type allows traders to pinpoint in advance levels at which they would like to enter or exit the market.

IOC|Immediate or Cancel

The Immediate-or Cancel time in force applied to an order dictates that any portion of the order that does not fill immediately will be canceled.

GTD|Good-til-Date

The GTD (Good-til-Date/Time) time in force lets you select an expiration date and time up until which an order will continue to work. Setting this attribute requires both a time in force selection of GTD, a date entry in the Expiration Date field, and a time entry in the Expiration Time field if that level of detail is required. Note that if you only enter a good-till date, the unfilled order will cancel at the close of the market on the specified day.

DTC|Day-til-Cancel

It allows a cancelled day order to remain on the screen so it can be placed again.

OPG|Opening

This can be added to a MKT or LMT order to turn them into orders "order type MKT + time in force OPG" or "order type LMT + time in force OPG".

How to Place an Order if you Wish to Execute at the Opening Price or Closing Price



Nikkei 225 Futures & Options, Nikkei 225 Mini, TOPIX Futures, mini-TOPIX Futures, JPX Nikkei 400 Futures, TSE Mothers Index Futures, TOPIX Core30 Futures, TSE REIT Index Futures, NY Dow Futures


Day Session

Opening Auction

8:45

Regular Session (Zaraba)

8:45–15:10

Closing Auction

15:15

Night Session

Opening Auction

16:30

Regular Session (Zaraba)

4:30–5:55

Closing Auction

6:00


If you wish to execute at the opening price, you can place an MKT (Market) or LMT (Limit) order during each pre-opening session. However, in the case of LMT (limit price), you need to place a lower limit price than the expected price for selling, and a higher limit price for buying. (The limit price must be within the price range set by the market.)

If you wish to execute at the closing price, you can place an MOC (Market-on-Close), LOC (Limit-on-Close) or LMT (Limit ) order. MOC and LOC orders expire at the end of each session. MOC and LOC orders placed during day session will not be carried over to the evening session, and LMT orders must be placed at the start of the pre-closing session with a lower limit price for selling and a higher limit price for buying. If you are buying, you must place a higher limit. LMT (limit price) requires a lower limit than the expected closing price for selling and a higher limit for buying at the start of the pre-closing (within the market limits). Please note that MKT (Market ) orders placed during the pre-closing session will not participate in the closing auction.

Please note that there is no guarantee that orders will be executed at the opening or closing price. For further details, please refer to the the exchange's webpage.



Japanese Government Bond (JGB) Futures


Morning Session

Opening Auction

8:45

Regular Session (Zaraba)

8:45–11:00

Closing Auction

11:02

Afternoon Session

Opening Auction

12:30

Regular Session (Zaraba)

12:30–15:00

Closing Auction

15:02

Night Session

Opening Auction

15:30

Regular Session (Zaraba)

15:30–5:55

Closing Auction

6:00


If you wish an execution at the opening price, you can place a MKT (Market) or LMT (Limit) order during the pre-opening. However, in the case of LMT (limit), you need to place a lower limit price for selling and a higher limit price for buying than the expected opening price. (But only within the price limits set by the market).

If you wish an execution at the closing price, you can place an MOC (Market-on-Close), LOC (Limit-on-Close) or LMT (Limit) order before the closing auction. However, in the case of LMT (limit price), you need to place a lower limit price for selling and a higher limit price for buying than the expected closing price. (But only within the price limits set by the market).

Please note that there is no guarantee that orders will be executed at the opening or closing price. For further details, please refer to the exchange's webpage.



Japanese Stocks on Tokyo Stock Exchange


Morning Session

Opening Auction

9:00

Regular Session (Zaraba)

9:00–11:30

Closing Auction

11:30

Afternoon Session

Opening Auction

12:30

Regular Session (Zaraba)

12:30–15:00

Closing Auction

15:00


If you wish to execute at the opening price of the morning or afternoon session: During the pre-opening session, you can place an order in MKT (Market) with an expiration date of OPG. This order type is only supported by Tokyo Stock Exchange (TSE), but if you place an order using SMART, it will be automatically routed to the TSE. If the order is not executed in the morning session, it will be carried over to the afternoon session, and if the order is not executed in the afternoon session, it will be carried over to the closing price.

If you wish to execute at the closing price, you can place an order using MOC (Market-on-Close) or LOC (Market-on-Close). This order type is only supported by Tokyo Stock Exchange (TSE), but if you place an order using SMART, it will be automatically routed to the TSE. Since trading hours are divided between the morning and afternoon sessions, MOC and LOC orders placed in the morning session will be executed or expire in the morning session. If you wish to execute at the closing price in the afternoon session, you can place MOC and LOC orders after at the opening of afternoon pre-opening (12:05).

Please note that there is no guarantee that orders will be executed at the opening or closing price. For further details, please refer to the exchange's webpage.

JapanNEXT Night Session Trading

We offer trading during the Japannext night session (16:30 - 23:59). Orders can only be placed via TWS and the Client Portal, not via the IBKR Mobile App.

In order to place an order during the JapanNEXT night session (16:30 – 23:59), you need to specify JapanNEXT Direct (direct) as the destination market and check the "Allow this order to be filled outside of RTH" box for the expiration time.

JPY Denominated Futures and Future Options Listed on SGX and Globex

You can trade JPY denominated overseas futures and future options in the same account as for domestic products (IBSJ account). Please note that you need a trade permission prior to trading. See available products for trading.

Trade Permission

Please log in to the Client Portal and go to Trade > My Trading Permissions > Request & Configure Trading Permissions > Futures or Futures Options and check the box for Singapore or United States to apply for trading permission. Please note that you will need to meet the trading requirements to be allowed to trade.

Real Time Market Data

If you wish to see the real-time market data, you need to purchase the market data. Please login to the Client Portal and click the "Head/Shoulders Icon" > User Settings > Market Data Subscriptions and click the Configuration (gear) icon to select the relevant market data.

Trading Hours

Trading hours are same as the ones for SGX and Globex.

Taxation

Both overseas futures and options on futures are subject to general taxation as miscellaneous income. Gains and losses cannot be offset against those of domestic products. Additionally, losses cannot be carried forward for the next 3 years.