Equity Derivatives Market
The Equity Derivatives Market, formally Safex, was established in 1988 to provide a secure and efficient on-exchange market for trading Derivatives in South Africa. Today the market provides professional traders and private investors with a platform for trading Futures, Exchange Traded CFDs, Options and other sophisticated Derivatives Instruments in a liquid and transparent environment. The regular administration of margins prevents participants from accumulating large unpaid losses, which could impact on the financial position of other market users (systemic risk). In addition, all contracts are against the Safcom clearing house which drastically reduces the credit risk from a traditional over the counter transaction.
- More than 1000 Derivatives Contracts offered.
- Standardised and bespoke contracts available.
- Physically and cash settled contracts available.
- High market activity from individual and institutional investors as well as hedge funds.
- Electronic central order book enhances transparency and liquidity.
- Aggregation of trade activity creates competition for the best price.
Unlike the cash market where your profit or loss is only realised once you sell the instrument, JSE Equity Derivatives pay the profit or loss on a daily basis. This payment is known as variation margin and is equal to the difference in the value of the Derivative from day to day.
All JSE equity derivatives have close out dates on which the contract expires. These dates happen quarterly at 12h00 on the third Thursday of March, June, September & December. Close out prices are determined by an auction process for JSE listed equities and the following link will allow you to watch these auctions live:
The protection and safeguarding of clients’ interests are of utmost importance. Regulation plays a crucial role in this regard. The Equity Derivatives Market is overseen by the Financial Services Board and controlled in terms of the Securities Services Act. Certain regulatory activities include the registration of all members and clients, strict financial requirements for members and regular inspection of members’ records and procedures.
Clearing and settlement
Trading on a formal exchange that connects buyers and sellers achieves transparent price discovery and all transactions are guaranteed through the Derivatives clearing structure.
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