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.
“Our pegged 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.
"With 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."
Earlier 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.