With few stocks trading in less than four-digit yen prices, taking a position in a Japanese stock can be a very expensive proposition for the small investor. With mini-stocks, an investor could buy 100 shares with only Y335,000.
Some brokers offer a wider selection of mini-stocks than others.
Mini-stocks are treated the same as regular stocks for tax purposes and typically do not incur any additional fees to the normal brokerage commissions. While policies differ slightly from broker to broker, mini-stocks generally work the following way. Ten mini-stock orders are pooled together by the broker and executed as a regular stock order at the following business day's opening price. The disadvantages of mini-stocks are that the client cannot specify a limit price nor limit period and cannot have a trade executed on the day of the order. Although public companies in Japan have catered primarily to institutional investors, some are beginning to conduct stock splits and to lower their minimum trading units in order to both boost liquidity and attract smaller investors.