Equity Derivatives Market
Use the JSE’s Equity Derivatives Market to trade index, single stock futures, exchange-traded contracts for difference (CFDs), index options, single stock options and other sophisticated derivatives Instruments in a liquid and transparent environment.
Gain access to the following:
More than 1 000 derivatives contracts
Standardised and bespoke contracts
Physically settled and cash-settled contracts
High market activity from individual and institutional investors, as well as hedge funds
An electronic central order book, which enhances transparency and liquidity best execution
Aggregation of trade activity, which creates competition for the best price
A variation margin, gearing (initial margin)
This market was formerly called Safex and was established in 1988 to provide a secure and efficient on-exchange market for trading derivatives in South Africa.
Regular margin administration 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 JSE Clear. This reduces credit risk.
Settlement (variation margin)
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 daily. This payment is known as the variation margin and is equal to the difference in the value of the derivative from day to day.
All JSE equity derivatives have quarterly close-out dates, on which the contracts expire: At 12:00 on the third Thursday of March, June, September and December. During the week of close-out, an admin period extension is implemented to accommodate high volumes for an extra 30 minutes (18:30-19:00). Close-out prices are determined by an auction process for JSE listed equities.
Clearing and settlement
All transactions are cleared through JSE Clear, which adheres to strict management standards and achieves transparent price discovery. JSE Clear’s risk management standards 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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