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Alternative Investments
Sunday, June 1, 2008
Aussie dollar deal

From early May investors have been able to trade Australian Dollar/Rand Currency futures contracts on Yield-X, the JSE’s interest rate exchange. This is the fourth currency futures contract to be launched on Yield-X within a year and follows the successful introduction of the Dollar/Rand, Sterling/Rand and Euro/Rand currency futures contracts.

Currency futures are derivative contracts which allow investors to trade the underlying exchange rate for a period of time in the future.
As with the other currency futures, dealers can trade near, middle and far contracts (for example, contracts with June, Sept and Dec expiry dates from the May date) with settlement taking place in South African Rands. The nominal contract size of the new trade is AU$1 000 with exchange fees of R1.14 (incl VAT) for each contract and initial margin requirements of R275 for each near-dated contract.
“Developed by the JSE with two market makers, Standard Bank and Investec, currency futures have really taken off. In the six months from Oct 2007 to March 2008, 538 565 currency futures contracts were traded to the value of R4,483,359,755.
“We believe this latest addition will add significantly to both values and volumes and that the market will remain bullish with volumes continuing to increase substantially in the future,” says Warren Geers, General Manager, Trading Division at the JSE.
 

Copyright © Insurance Times and Investments® Vol:21.5 1st June, 2008
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