Margin, Gaika+ and the Stock Yield Enhancement Program help investors manage financing costs and earn income on eligible cash and shares
Interactive Brokers, announced three new programs at Interactive Brokers Securities Japan Inc. (IBSJ) designed to help investors manage trading costs and earn income on eligible cash and shares.
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“Our goal has always been to help Japanese clients get more from every yen they invest,” said Ramir Roque Cimafranca, Head of Interactive Brokers Securities Japan Inc.
The centerpiece is a more cost-efficient approach to margin financing. When clients contribute cash toward a position, Interactive Brokers charges interest only on the amount financed, not the full position value. This approach is widely used in margin financing in markets around the world, and Interactive Brokers is now bringing it to investors in Japan.
The other two programs follow the same principle: putting more of an investor’s account to work. Gaika+ allows eligible non-JPY cash balances to generate income in yen, while the Stock Yield Enhancement Program allows eligible clients to earn income by lending fully paid shares, with the lending rate fully disclosed. Together, these programs bring Interactive Brokers’ global focus on cost efficiency and transparency to investors in Japan.
For example, consider a ¥10 million position funded with ¥5 million in client cash and held for 12 months at IBSJ’s interest rate of 2.466%. Charging interest on the full ¥10 million position would cost ¥246,600 annually. Because IBSJ charges interest only on the ¥5 million financed, the actual cost is ¥123,300 — a savings of ¥123,300, or 50%.1
“Our goal has always been to help Japanese clients get more from every yen they invest,” said Ramir Roque Cimafranca, Head of Interactive Brokers Securities Japan Inc. “These three programs put more of a client’s portfolio to work, — margin, cash, and shares — so every part earns its keep.”
IBSJ, an affiliate of Interactive Brokers Group, lets clients trade stocks, options, futures and CFDs across global markets from one platform built to keep costs low.
Interactive Brokers Securities Japan Inc. is a subsidiary of Interactive Brokers Group, an established global brokerage group. Interactive Brokers Group is Nasdaq-listed, is a member of the S&P 500, serves more than 5.4 million client accounts and reports more than USD 960 billion in client equity worldwide. IBSJ clients have access to products and technology developed within Interactive Brokers Group’s global brokerage business.
The three programs:
(1) Margin Trading: Pay interest only on what is borrowed.
Clients can trade stocks on margin, including shorting Japanese and US stocks, at a significantly lower margin cost, because interest is charged only on the amount financed.
(2) Gaika+: Put uninvested cash to work.
Clients earn daily income in yen on eligible non-JPY balances through automatic overnight currency swaps, with no added FX or market risk and no effect on cash available for trading. It applies only when the non-JPY currency interest rate is higher than the yen interest rate. Eligible balances can come from deposits or trading.
(3) Stock Yield Enhancement Program: Earn income on fully paid shares.
Clients can lend their fully paid shares to IBSJ, which in turn lends them to short sellers. Unlike many domestic programs that cap payouts, IBSJ pays clients 50% of the market-based borrow rate and discloses both the market rate and the client’s share. For example, if the market borrow rate is 4%, the client receives half of that rate, or 2% annually. On ¥1,000,000 of lent shares, that 2% payout would equal approximately ¥20,000 in annual income.
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