JIBAR Futures (STIR) are Short-Term Interest Rate Futures Contracts. The underlying instrument is the three-month Johannesburg Interbank Average 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.
Who is this for?
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.
- Can be used to hedge against short-term interest rate movements.
- A simple, standardised product with a linear payoff profile.
- Live quotes by liquidity providers on a central order book (COB).
- Risk mitigation through daily margin calls.
How to get JIBAR Futures
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.
- Futures Contracts are subject to margining, which means that you have to pay a deposit upfront to protect both parties should one party fail to hold up its part of the agreement. Daily interest is earned on this margin, which is held by the exchange.
- No limits apply to individuals, foreigners or corporate entities.
- Please speak to your broker about the details of the qualifying factors.
Contact a JSE Interest Rate Derivatives member on firstname.lastname@example.org