One-Day Margin Trading: earning without commissions (2013)

Choosing a different customer to give it away to

What Matsui made free in September 2006 was the trading commission on open-ended margin transactions. What it made free in January 2013 was the commission, the interest and the stock-lending fee on margin trades confined to a single day. The difference between a withdrawal after three months and the first rise in revenue and profit in seven years lay not in the size of the discount but in whom it was addressed to. A commission of 0.01% gives a customer holding a position for months no reason to switch; for a customer turning positions over several times a day it accumulates trade by trade. What Matsui went after was not a price point but the segment of customers on whom a price difference actually works.

The segment it chose became, in turn, the weakness in its earnings. Trades migrated to the product that charged nothing: in the year to March 2016 turnover rose 6% while equity brokerage commissions barely moved, and operating revenue in the year to March 2017 fell almost 20%. The financing spread and the premium short-selling fees put up in their place swing with the market and with demand to borrow stock. Once SBI Securities followed with a comparable service, even the advantage of having gone first thinned out. What Matsui bought with free trading was the seven years it took for zero commissions to become the industry norm.