PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

<p style="text-align: justify;">Founded in 1990 and a part of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Johannesburg Securities Exchange</span> (JSE), Safex is South Africa's licenced <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">futures</span> exchange under the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">Financial Markets Act</span>. A future is a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">derivative</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">instrument</span> or standardised contract which requires one party to deliver and the other to take delivery of a specified <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">commodity</span> on or before a specific date. Safex offers both <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">equity</span> futures based on JSE <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">listed</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">blue chip</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shares</span> and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">agricultural</span> futures on products produced by farmers in South Africa. Futures are usually highly <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">leveraged</span> and only require participants to invest about 10% of the assets which their contract commands. This potentially makes them highly <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">risky</span>. For this reason, we do not recommend that <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">private investors</span> get involved in the derivatives <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">markets</span>.</p>