Dividend Futures are contracts sold along with a future with their purpose being to pay out the difference between the implied dividend and the actual dividend. This effectively removes the dividend assumption risk from the contract and allows the participant to gain exposure to both the Share or index and the dividends that the underlying would pay.

Speculative Dividend Futures

Speculative Dividend Futures allow an investor to gain exposure to the dividends of an underlying index or Share over a period. This is in contrast to Dividend Futures which are traded in conjunction with a Index or Single Stock Future to remove any dividend assumption risk. These are cash settled contracts.

Dividend Neutral Futures

Dividend Neutral Futures are synthetic instruments in our system. When you trade a dividend neutral Future you will get the underlying future and the relevant dividend Future . This allows on screen prices to be made in dividend protected Futures and also allows for ease of booking.

Who is this for?

Several market participants can benefit from using these products, including investors wanting to speculate on the value of the dividends paid from a stock or index over a certain period. This may be due to a particular understanding of the underlying or a desire to gain exposure to the dividend on the underlying.  These instruments remove any dividend assumption risk from a future price on an index or stock.

Features

Dividend Futures

• Removes dividend risk from Futures products;
• Does not incur additional fees or initial margin;
• Is not a tradable instrument; the Dividend Future is a companion instrument to an existing Future

Speculative Dividend Futures

• Allows speculative trading in dividends of an index or share.
• Is a yearly contract with no forward valuing.
• Incur fees and initial margin.

How to get Dividend Futures

Register as a client with a JSE Equity Derivatives member.