JIBAR Futures (STIR) are Short-Term Interest Rate Futures Contracts. The underlying instrument is the three-month Johannesburg Interbank Agreed Rate (JIBAR) rate. The JIBAR is used as the barometer of Short-Term interest rate movements in South African financial markets. JIBAR is an average rate (determined from borrowing and lending rates) that is independently derived from quotes obtained from a number of different banks for one-, three-, six- and twelve-month terms. The STIR Contract is an efficient way to obtain exposure to the South African interest rate markets. When investors expect interest rates to move up, they can sell STIRs. When they expect rates to move down, they can buy STIRs.
The instrument can be used by investors looking to enhance the long-term performance of a portfolio of assets, hedgers seeking to protect an existing portfolio against adverse interest rate movements, speculators hoping to make a profit on short-term movements in interest rates or arbitrageurs looking to profit from price the differentials of similar products in different markets.
Register as a client with an authorised JSE Interest Rate Derivatives member firm, deposit the required initial margin and sell or buy according to your needs.
