Trading Oz or Japan stocks?

[Ato]

Or both?

I have a query regarding trading stocks. I live in Japan, but am Australian. Now I can trade stocks in Oz or Japan. I guess both would be nice to do. My question largely is about trading in Oz. Aside from the language, trading in Japan is fairly straightforward as I live here.

For Oz, my question is how should I account for the exchange rate? For example, let's say I transfer over Y2,000,000 to my Oz bank account to use for trading when the yen to dollar is at 80 yen to the dollar. That means I end up with AU$25,000. At some point I want to transfer the money back to Japan, so I need to make sure I'm accounting for the exchange rate. How should I go about doing this? I'm a little confused about the whole thing. I'm thinking I need to make x% of profit on trades to cover an exchange rate loss, or something along those lines.

Is it even worthwhile trading stocks in Oz if the exchange rate is going to be a factor that may wipe out any gain made from trading? (Would it wipe it out?)

(I'm going away for a few days over the weekend, so I'll check this thread again when I come back.)

 

[WilliamKong]

Or both?

I have a query regarding trading stocks. I live in Japan, but am Australian. Now I can trade stocks in Oz or Japan. I guess both would be nice to do. My question largely is about trading in Oz. Aside from the language, trading in Japan is fairly straightforward as I live here.

For Oz, my question is how should I account for the exchange rate? For example, let's say I transfer over Y2,000,000 to my Oz bank account to use for trading when the yen to dollar is at 80 yen to the dollar. That means I end up with AU$25,000. At some point I want to transfer the money back to Japan, so I need to make sure I'm accounting for the exchange rate. How should I go about doing this? I'm a little confused about the whole thing. I'm thinking I need to make x% of profit on trades to cover an exchange rate loss, or something along those lines.

Is it even worthwhile trading stocks in Oz if the exchange rate is going to be a factor that may wipe out any gain made from trading? (Would it wipe it out?)

(I'm going away for a few days over the weekend, so I'll check this thread again when I come back.)

You can try to fully hedge your currency exposure. One thing I suggest you to do is to ask your broker to see whether they have this hedging facility in place. I know some of our clients they trade in the US markets, and have no currency exposure since all the trades are done in USD (they just simply deposited USD and then trade US markets without any currency exposure).

 

[Ato]

Hey, thanks for getting back to me on this. I had kind of forgotten about it.

You can try to fully hedge your currency exposure. One thing I suggest you to do is to ask your broker to see whether they have this hedging facility in place.

What does this mean exactly?

I know some of our clients they trade in the US markets, and have no currency exposure since all the trades are done in USD (they just simply deposited USD and then trade US markets without any currency exposure).

Yeah, I have some money in Australia which I'd use for trading. But I did at some point in the past send that money from Japan to Oz. So whenever I bring it back to Japan, I'd want to make sure I am not taking a loss right? I mean, those guys who trade the US markets, at some point in their life they are going to want their money, and then they are going to have to deal with currency issues, right?

 

[skc]

One way to get FX neutral is to find a FX broker to short $AUD25000 against the Yen after you've done your initial exchange. You will however be required to tie up some capital on the FX trade, you may also have to pay interest on the AUD short.

 

[Ato]

Goodo. I'll have to do some more research on this stuff.

I guess though, thinking about it, it doesnt matter so much. The money I have in Oz, I intend to use for trading as initial capital and then just build it up from there over many years. So I guess only the initial capital sent back to Oz is affected by making a loss or gain compared to the rate I initially sent it at. The rest built up over the years will be profit and wouldnt have had to deal with exchange rates being brought into Oz (although I'd have to deal with rates bringing the money back to Japan).

 

[noirua]

My own trading is simple; only shorted one stock in my life and generally followed others at the time. I remember putting envelopes into the letter box of my bank and they bought and sold shares at best for me, on that basis - I was on the way to work in the morning in the 1960s and 70s.

These days I've only gone as far as trying to get stock in lightly traded shares by my simple method. No doubt others do as well and I use two brokers, one in the UK and one in Aus.
Last trade was $1 and only one offer at $1.02 for 200,000 shares and one bid for 20,000 at 98c. No movement all day. I place a bid for 180,000 shares at 95c. Then place further bids for 100,000 shares at 92c, 100,000 shares at 91c, and 100,000 shares at 90c. Hopefully these bids may unnerve the holder of the $1.02 offer.
There are dangers of course but it is surprising how often I find this very simple method works in lightly traded stock.
Soon after the 98c bid is taken up and the offer lowered to 98c. I cancel the bid at 95c leaving the 91c and 90c bid on the table as the highest and add a further bid at 89c for 100,000 shares.
The 98c offer is then lowered to 96c and that point I come in with a bid for 180,000 shares at 96c and following that, cancel all the other bids.

Obviously I've simplified the trading method above, that often takes several days. A simple sole I am and that's the best I can do - Good Luck.

 

[IFocus]

Ato if you are still looking at this you could use an IB account which lets you hold your account in a number of currency's I sure Yen would be one of them if that's what you wanted.

When you make a trade in the ASX IB transfer the money automatically into $Aus and buy the shares. When you close your position the amount remains in your account in $Aus.

If you wish to move the amount back to Yen then its a simple mouse click.

You are charged a transaction fee (nothing major) and of course you pay the price across the spread.
Its a FX trade on its own.

Advantage is you are subject to currency fluctuation only while holding the position not on the total account

In the mean time you can trade stocks in Japans markets from the same account.

I use IB so I can trade US markets and even with a rising $Aus against me I still managed to do quite well

Hope this helps