The JSE’s International Derivatives give investors exposure to the price movements of internationally listed blue chip shares through Single Stock Futures (SSFs). Investors do not require exchange control permissions or the foreign trading accounts. Contracts are cash settled in Rands (ZAR) and can easily be accessed through JSE Equity Derivatives members.
What is the difference between a standard futures contract and a dividend neutral futures contract?
Some of our single-stock futures products are available in both standard and dividend neutral form.
Traditionally futures take out the implied dividends of the underlying over the life of the contract. For example, if we agree to trade the share at some future date, we would take all the expected dividends over that period out of the future price since we would not receive these when trading the share on that future date. Undeclared dividends are based on dividend assumptions which may prove to be incorrect. To remove this dividend risk the JSE has created dividend neutral single-stock futures which removes this assumption risk. For more information on these contracts, please see the section on Dividend Derivatives
Who is this for?
The product is useful to speculators and investors seeking offshore exposure and diversification. These include institutional and private investors, trusts and funds seeking opportunities to trade and gain exposure to the price movements of foreign equities. When trading with International Derivatives, market participants can either go long (buy a Future) or go short (sell a Future) to realise a profit. At present, the JSE does not list Options on International Derivatives.
- Provides investors exposure to international instruments
- Capital efficient way to gain exposure to share movements
- IDXs are liquid and easily traded
- Incur lower brokerage fees than actually trading in the underlying shares
- Investors can take advantage of price movements in the underlying shares
- Corporate activities are taken into account and independent valuations are calculated by the exchange
- Provides short selling opportunities to benefit from downward price movements.
How to get it
Register as a client with an authorised Equity Derivatives member.
You are allowed to trade and hold positions in International Derivatives if you are:
- a South African corporate entity (no limits applicable)
- a resident financial service provider or collective investment scheme (subject to your foreign portfolio allowance)
- a resident long-term or short-term insurer (subject to your foreign portfolio allowance)
For further details on qualifying factors, speak to your broker.
International Derivatives follow the same margining process used in the Equity Derivatives Market. Initial margins and variation margins apply. For further details about the margin requirements relating to this product, speak to your broker or click here.