Merino Wool Indicator Futures Contract
The JSE, in collaboration with Cape Wools SA is proud to bring the Merino Wool Indicator Futures Contract that will provide market participants with a tool for hedging against price risk. The contract will enable the Wool industry with an opportunity to better manage the price risk through the use of futures contracts. The contract is priced and traded in Rands per kilogram. In partnership with Cape Wools SA, the contract is cash-settled and references two-weeks of transactional data for a specific futures expiry. This contract is easily accessed via JSE commodity derivatives members.
Who is this for?
This product is often used by producers of wool and processors with an interest in protecting themselves against adverse price movements in the underlying physical or spot market. In addition to these two key groups of participants, co-operatives, trades, and financial institutions rely on the contracts to either extend fixed prices to their clients.
- Secure, affordable and flexible.
- Derivatives contracts enable institutions to fund producers who hedge their price risk. In so doing, sustainable production is encouraged
- Provides a platform for price discovery and efficient price risk management for the Wool market
- Transparent as trade takes place on an electronic platform.
- All transactions are guaranteed through the derivatives clearing structure.
- By nature, derivatives can be risky and should be not be tackled by novice investors.
How to get it?
To access this product, register as a client with an authorised JSE Commodity Derivatives Trading Member, deposit the required initial margin and sell or buy according to your needs.
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