Chi-X Japan prepares new short-selling order type
Proprietary trading system (PTS) Chi-X Japan is to introduce
a new pegged short sell order type from June, which offers investors a simpler,
faster way to short-sell effectively in Japan.
The pegged short sell order type is designed to dynamically
adjust passive orders to the best short-sell price as the market moves,
eliminating the need to amend or cancel orders and keeping firms’ priority
relative to other pegged short-sell orders at the same price on the market.
short sell order type will help you preserve queue position, which is very
important in Japan,” said Samson Yuen, CTO, Chi-X Japan. “Amending an order can
cause a trading firm to lose its position in the queue, making short selling
difficult. Our solution overcomes that problem."
Short-sell orders in Japan are also subject to the uptick
rule imposed by Japan's
regulator, the Financial Services Agency – which prohibits short selling at prices no higher than the latest market price. This makes the pegged order
type more useful, since it essentially allows trading firms to follow
the market without needing to update a passive short-sell order.
our new order type, market participants don't have to worry about following the
market, analysing market data, amending or cancelling orders and then sending
out new ones - all of which adds latency,” said Yuen. “The Chi-X Japan pegged
short sell order follows the market automatically, making the process much simpler
and more efficient."
this month, Chi-X Japan also introduced
hosted risk controls, which it says will offer cost advantages to brokers and
latency-sensitive traders by removing the need to have their own systems.