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What Is Delivery Settlement (Genwatashi / Genbiki)?

Genwatashi and genbiki are methods of settling a margin trading position through delivery of the underlying shares rather than an offsetting market trade. Genwatashi settles a short position by delivering shares already held, while genbiki settles a long position by paying cash to receive the shares.

What is genwatashi?

Genwatashi is a method of settling a short (margin sale) position by delivering shares of the same stock that the investor already holds, instead of buying them back on the market. If the investor already owns the underlying shares, this allows settlement while avoiding the price risk involved in a market buyback.

What is genbiki?

Genbiki is a method of settling a long (margin buy) position by paying the securities firm an amount equal to the value of the position and receiving the underlying shares, instead of selling them on the market. After genbiki, the shares continue to be held as an ordinary cash holding, so it is necessary to confirm the funds required in advance.

This article is provided for general informational purposes only and does not recommend or solicit the purchase or sale of any specific investment method or security. Final investment decisions are your own responsibility.

Frequently Asked Questions

How does delivery settlement differ from an offsetting trade?
An offsetting trade settles a position by buying back or selling on the market, whereas delivery settlement (genwatashi or genbiki) settles a margin position by delivering or receiving the underlying shares directly, without a market trade.
How much cash is needed for genbiki?
With genbiki, the investor must pay the securities firm an amount equal to the value of the margin buy position, so it is important to confirm the funds required in advance.

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