Equity Derivatives Market
The Equity Derivatives Market, formerly 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 cleared by the
JSE Clear clearing house which 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. During the week of close out there is a admin period extension implemented to accommodate high volumes for an extra 30 minutes (18h30-19h00), for the 4 business days prior to and including the closeout day. Close out prices are determined by an auction process for JSE listed equities from 12h00 to 12h15.
Clearing and settlement
Trading on a formal exchange that connects buyers and sellers achieves transparent price discovery. All transactions are cleared through JSE Clear which adheres to strict management standards. The risk management standards adopted by JSE Clear are in line with international requirements for central counterparties. The main function of JSE Clear is to reduce counterparty credit risk in the exchange traded derivative market in South Africa.
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