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Profiling Japan's Daytrading "Mister Watanabe"
Japanese individuals now make up 43% of total equity volume - up dramatically from a mere 27% in November of last year - with commissions at brokers quadrupling year-over-year and an increasing number of 'get-rich-quick' investors turning to day-trading. Amid the huge volatility induced by Abenomics and deregulation of margin trading - enabling 300% leverage, the 'investing' public's attention span has collapsed to minutes: "winning at stocks is about predicting the future," one trader said, "I have a lot better chance of predicting what’s going to happen in the next few seconds than what will happen in the next six months." The volatility provides more room for these 'day-traders' to make money when they bet correctly (forget about the downside) on a stock's direction - long or short - and "now you can borrow endlessly." What could go wrong? One trader, as Bloomberg notes, leveraged $4.5mm in cash into as much as $67mm in daily stock bets and made $350,000 this year - triple his annual average of the last eight years.
Via Bloomberg,
Sitting before a cluster of computer screens in an apartment with the drapes shut, it took Naoki Murakami seconds to make $3,500 betting $1 million that Tokyo Electric Power Co. (9501) shares would fall a fraction of a percent.
The 34-year-old day trader first sold 50,000 shares at 558 yen ($5.70), then three more lots at 1-yen intervals as the stock dropped. He got out $2,500 richer, repeated the trade, and seconds later had $1,000 more. Within minutes of the market opening, the former water-purifier salesman had made more than the average Japanese person earns in a month.
Stringing together 20 or 30 similar trades each day, Murakami said he’s almost doubled his money to $750,000 this year. He calls himself the smallest player in a group of seven day traders who chat with each other online, vacation together, and cumulatively buy and sell almost $100 million in stocks each day, using leverage to increase the size of their bets.
Day trading helps explain why Japanese individuals now account for more than 40 percent of the nation’s equity volume, or about as much as the overseas institutions that once were the biggest traders. They’ve also helped make Japan the most volatile developed market, which is good for some and bad for others.
"They’re creating the volatility,” said Curtis Freeze, who helps oversee about $320 million as chief investment officer at Prospect Asset Management in Tokyo. “It’s great for them, but for the average long-term investor, it just scares them away -- including me.”
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“Watching stocks go up and up since the start of Abe’s government got me thinking about investing,” said Maki Murayama, a 38-year-old Tokyo office worker. “But seeing what’s happened lately, I realize it’s not that simple.”
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Dramatic price movements aren’t the only thing that’s made Japan a day trader’s paradise. Deregulation of margin trading opened the flood gates, Murakami said. After rules were relaxed in January, investors can borrow three times as much as their brokerage account balances and turn loans over the instant they exit a trading position.
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“Now you can borrow endlessly,” Murakami said.
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Working barefoot in a T-shirt and shorts out of a spare bedroom in his rented apartment in Osaka, Murakami said he’s made $350,000 this year, about three times his average in the previous eight years.
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One of Murakami’s friends, who goes by the blog name Tesuta, said looser rules let him leverage $4.5 million in cash into as much as $67 million in daily stock bets.
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The number of shares traded by individuals rose to a record in May, some 43 percent of Japan’s total equity volume, up from 27 percent before the rally started in November, according to the Tokyo Stock Exchange.
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On an average day, the group of seven day traders to which Murakami and Tesuta belong buy and sell somewhere between $80 million to $100 million in Japanese stocks, according to estimates from the members.
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“When shares don’t move, you can’t get an opening for a trade,” he said. “Now that the market is moving, I feel like I have to make the most of it.”
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Tesuta has tripled his fortune to $4.5 million this year, he said in an interview at a Chinese restaurant in Osaka. Making 200 to 300 trades each day and cutting losses quickly to minimize the cost of bad bets, the 33-year-old said he’s managed to profit even amid the market’s recent decline.
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“Winning at stocks is about predicting the future,” Tesuta said. “I have a lot better chance of predicting what’s going to happen in the next few seconds than what will happen in the next six months.”
Now, where have we seen this before?
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"This is what happens when you're a fucking idiot." LOL!
I'm putting it all on double six's at 30-1!
300% leverage, whoopee!
Recovery!
I am playing that Wartune from the ad. Shwing!
Daytrading: The hardest easy money you'll ever make.
how do you say "going fetal" in japanese?
going FATAL is "Sepuku".
Close enough?
Looks like the suicide rate in Japan will be rising over the next couple months.
Japan's suicide forest:
http://www.youtube.com/watch?v=4FDSdg09df8
Meh Japs should learn from the brilliant Americans and use only HFT!!
So many reaL TRADERS have been there.....this is why having quality hookers and Jack Daniels are vital tools in trading....
Japan, we need more quantitative sleazing..
http://www.bis.org/country/jp.htm
300% leverage?....It's all good... It's different this time.
300% leverage? What pikers. Deutche Bank is at what... 5000%?
That video is hysterical.
Anyone hazard a guess to when it happened? My best guess would be around Jan 21 2008, which makes it extra painful, given that the Dow rallied 1000~ points for the next 2 weeks after that fall.
1:15 cash leverage... i wish the best of luck...
Shoe shine stocks?
I can't wait to see the article about "Mr. Watanabe" suiciding himself, after he threw "7's".
"The Suze Orman Show"| Tax Free Municipal Bonds |Using a broker or not -2008
Advanced Japanese daytrade station, yo!
Are you ready?
http://www.youtube.com/watch?v=7vctrc6AHos
I guess Bloomturd had trouble finding anyone who lost money investing over there so it was difficult to be balanced in their reporting. lulz
Me very jealous. Things can only improve.
Shoeshine Boy - Japanese
http://www.youtube.com/watch?v=0ihS4ww1yYQ
shoeshine boy 1936
Margin calls create a positive feedback loop. Trigger a grenade, instead of an air bag. What could possibly go wrong?
Golden Slumbers, The Beatles lyrics
http://www.youtube.com/watch?v=pzzZXejz17E (1:32)
"Jeeves, fetch my passport, laptop, and book me a flight to Japan""Business or pleasure sire?" "Oh with the margin rules they have it is going to be a pleasure."
"Oh, and get my broker on the line, I think there might be a possibility to sell physical PM's in Japan." "Heh, "over spot" is starting to mean roll over and take it doggy style."
Mt Gox BIT DUST
Temporarily unavailableWe are currently experiencing technical issues.
Oh well, it was probably only his student loan he was betting with.
The Markets Will Test You. On a long enough time line, the emphasis is on the word WILL.
Short seller, in Japan I think that refers to used girls panties?
well we just need to send them a box of Algo's with the latest HFT weapon loadout that will fix em...... They must be illegal overthere.
I don't think these are 'get rich quick' traders - I think these are last-gasp older traders who have potentially already lost everything and who, when they lose, this last desparate gamble to recover some of their savings for old age, as they will, will simply kill themselves en masse. I think that Japan is about to see a wave of suicides among older people that will make even suicide-friendly Japan shudder.
The honorable government of Japan should all, down to the lowest ministerial level, join them.
Why do I have a feeling this doesn't end well?
Easy come, easy go.
Take what you can and run... but then the lure of greed and not knowing where else to go keeps you in the game.
Hey Wanabe Watanabe how soon till shit blows up in your face? Good luck day trader. Big ball decerebrate celebration.
That guy in the video should have his own show, seriously, on CNBC...;)
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