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tl;dr experimented, discovered differences with the US market, eked out a profit
I've got an IBKR JP account, and I've dabbled in a few things just to try to figure out nuances of the Japanese markets. For example, until very recently, only a handful of stock options were backed by market makers, liquidity sucked, and fills were hard to get.
I've traded stocks, stock options, index options, and index futures.
This post is about index options. The Nikkei 225 index has 3 sizes, full, mini, micro. Micro doesn't have options.
Each point on these represents 1000 yen, 100, and 10, respectively. For easy math, assume 100 yen = 1 USD (though it is closer to 153 these days).
Here I was trading mini index options. I opened up a calendar spread, selling a near term put against the next expiry put (weeklies on Wednesdays and Fridays). I held the short leg through expiry because I wanted to see how assignment worked. Obviously I knew it was financially settled, but I was curious.
The first thing to notice was margin: there is no margin offered in Japanese accounts, so it tied up nearly 500000 yen ($5k) to open the short leg, NOT offset by my long leg.
Trading ends the day before expiry. Then settlement is made against the Special Quotation at 9am the next day. So you've got to white knuckle it overnight.
Even though SQ happened already, the option still showed in my IBKR positions the whole day and the value seemed to fluctuate (though in fact it had been fixed at 9am), messing up my daily PnL.
After I got assigned on the short leg, I wanted to sell to close the long leg. At this point, the long leg was quite ITM, by 5 strikes or do. There was no quote on the options chain, even though it was the next expiry! I noticed quotes were present for 2 or 3 ITM strikes and a bunch of OTM strikes. I set a MARKET order to sell to close and it didn't fill, even after an hour.
I ended up selling another put to create a vertical, as a way to synthetically close my position and lock in some profit. Note, however, that again there was no margin, so again I needed 500k yen to maintain the position. I ended up holding everything through assignment.
I made 5000 yen from opening the positions and made another 4565 yen on assignment. Total profit: 9565 yen ($95 by that earlier assumption, but really like $60 at today's rate).
Conclusion: this isn't very capital efficient due to no margin. The lack of quotes for ITM options is concerning, and especially the lack of a fill for a market order. I think I'll stick to index futures or options I want to hold through expiry.