The Japanese arm of Saxo Bank has lowered the minimum order size for stock indices CFDs to give their traders more flexibility when it comes to small trades.
Saxo Japan’s investors can now open trades from 0.1 or 0.01 lot per order depending on the tradable instrument. This new trading structure lowers the barrier for indices trading and features enhanced benefits for CFDs traders.
“Example: Until now, the minimum trading unit for the US N100 stock index was 1, so a minimum of 176,951 yen was required for trading. However, since the minimum trading unit has been changed to 0.01, it is now possible to trade from 1,770 yen,” the broker explains.
The move, geared toward attracting more young clients, eliminates the barriers that many investors face when trying to invest in a diversified portfolio of listed securities. Fractional trading allows investors to diversify their investment portfolios by spreading their relatively small capital over a broader range of stocks.
US brokers were the first to let investors buy and sell fractions of stocks. As they looked beyond the no-fee trading war, the move set off a new rush among global brokers to do the same amid increased competition in the industry to attract the next generation of investors.
Based in Tokyo and licensed by the Financial Services Authority, Saxo Bank Securities is a subsidiary of Danish Multi-Asset broker Saxo Bank. The branch provides online trading and investment tools to both retail and institutional clients.
The delivery of a trading environment to the thriving Japanese market goes hand in hand with the company’s overall strategy to expand in the Asia Pacific region. However, Japanese markets are known as cutthroat in terms of competition and spreads, which inherently places a disadvantage on retail brokers. In addition, the maximum leverage for retail traders is limited to 1:25 and 1:100 for institutional clients. There are so many restrictions on using certain trading strategies like hedging, arbitrage, scalping and EAs.
Additionally, Japan’s brokers have been lowering trading fees amid increased efforts to attract retail traders. They have seen sliding trading volumes in Japan and the move may be an attempt to stimulate the trading activity.
The opening bell for the battle rang when fixed-rate commissions on stock trading were dropped in many Western markets. Several brokers pounced on the opportunity, dropping commissions as much as 90% and offering no-fee trading for limited periods. Amid the retail trading boom, which has benefited high-flying apps and legacy platforms alike, Japanese brokers are looking to jump in.