Stock Futures Market
Single Stock Futures Trading Allows Investors To Hedge Their Portfolio
SSF or Single Stock Futures trading has fundamentally changed the landscape of derivative trading globally. Single stock futures trading allows investors to hedge their portfolio and exploit market opportunities to achieve maximum returns on their investment easily and with minimum capital.
You can buy SSF’s on the South African Futures Exchange (SAFEX) which is a subsidiary of the JSE. Single stock futures can be explained as a standardised derivative instrument consisting of a set number of underlying assets that gives investors exposure to price movements. These underlying assets are usually listed shares. Therefore, when you buy an SSF contract it will equal the same value as 100 of the underlying shares, if you take dividends and interest into account.
Most importantly, you do not have to pay the full price of the 100 underlying shares. The only requirement is that you pay into your SSF trading account enough money to cover the initial margin. The initial margin is a fixed Rand amount per contract as determined by SAFEX. Therefore you might only need R15,000 to purchase SSF contracts up to a value of R100,000. If your investment rises to R115,000 – equalling a 15% rise in the value of the position – you will in fact make a 100% return on your investment, as you only invested R15,000 initially. This is the effect of gearing.
Another important feature of SSF trading is that you can open a “long” position or a “short” position. A “long” position involves purchasing the SSF contracts and selling them again at a later stage, hopefully after the price has risen.
Therefore “long” positions make money in a rising market. A “short” position is the reverse – selling SSF contracts first and buying them back later. Behind the scenes, your market maker will borrow the shares on your behalf, allowing you to sell them even though you do not actually own them. If you manage to buy the SSF contracts back at a lower price, you will make money. Therefore “short” positions make money in a falling market.
SSF’s are very powerful trading instruments that will benefit active traders who look to optimise their cashflow. The opportunity for gains from margin trading is appealing and increases market accessibility. However, SSF trading involves the risk of loss which can exceed your initial investment. Single Stock Futures may not be suitable for all investors and will depend largely on your appetite for risk and your overall investment strategy.
SSF trading is done in real time on the PSG Online single stock futures trading platform. You can place your single stock futures orders, receive order confirmations and view a live holdings and cash available screen as your trades are matched in the market through the PSG Online platform.
Single stock futures are capital efficient investments that allow you to diversify or hedge your portfolio, because SSF’s require only a margin deposit to open a position rather and the full cost of the underlying shares. If you own a normal share position, you can sell that position and buy it back as a SSF. You will need to leave the initial margin in your single stock futures trading account, but the difference between the initial margin and the entire value of the position will be cash available for you to withdraw from the account.At the same time, SSF’s are cost-effective hedging vehicles that allow you to fully exploit market movement whilst benefiting from corporate actions. In other words you will receive the benefits of dividends and rights issues, where these are relevant. Short positions allow you to make money even in a falling market.
Our SSF trading system can take your instructions after hours and execute them once the market opens – or store stop orders that will monitor the market and execute at your chosen price once the market has reached the exact level you specified.
An SSF trading account is “marked to market” every day. This means that your profits and losses are paid into or taken from your cash account on a daily basis. If you have opened a long position and the underlying asset price keeps rising, you will receive that cash to trade with or even withdraw daily. If, however, the market moves against you and losses are taken from the SSF trading account, you have to deposit more cash to ensure that you never leave a negative balance on the account. The initial margin for single stock futures is always kept separate from your cash account – you cannot use the initial margin to offset losses while the position is open. Once the position has been closed, you will receive that initial margin back into your account.
If you are interested in trading single stock futures you can complete the simple online registration process.
• STEP ONE: Register online for a SSF account and PSG Online web profile.
• STEP TWO: Provide us with your FICA details if you are new to PSG Online. PSG Online will open your SSF account within 48 hours of receipt of your FICA documents.
• STEP THREE: Login to your account. You will use the same username and password chosen when you registered for your web profile in Step One.
• STEP FOUR: Select the appropriate SSF account and place an order through the New Order screen.
Brokerage is charged at 0.5% (excl VAT) of the value of the transaction.
A booking fee of R60 per SSF is charged when a new position is opened per day – therefore you pay only for the opening leg of all transactions, and only once per day per SSF. Therefore you can buy into the Sasol SSF 10 times on one day and you will only pay R60 once.
Short positions incur a further cost of 1% (incl VAT) of the value of the transaction per year for borrowing the underlying instruments. Short positions that are only open for a short time will therefore incur that cost per day as long as the position is open.
Interest payable on the SSF cost value would be determined daily by the market maker in relation to the ruling SAFEX rates.
Interest will be paid on cash balances in your single stock futures trading account at the JSE Trustees rate.
Need single stock futures explained in more detail? Contact a PSG Konsult financial advisor or register to start SSF trading.
PSG Online offers direct market access to the JSE with live prices. The latest list of shares available for SSF’s can be found on our website.
We also offer single stock futures trading in certain instruments available for trading through the JSE’s central orderbook. These would include index futures, like the ALSI based on the Top 40 shares weighted by market capitalisation, and international SSF’s, also called IDX futures. This list is updated frequently and also available on our website.
You can find single stock futures explained in more detail on our FAQ page.
source: http://www.psgonline.co.za/trade/sff-stock-futures.php
Spain In Pain Brings Markets Downtown Charlie Brown
|
|
New York stock exchange Photo Mugs New York stock exchange trading floor.Photographed in New York City, USA….. |
|
|
Marketing Trends 2000 Featuring John Tesh & Leeza Gibbons $14.95 … |
|
|
Audioseminar CD Winning Methods of the Market Wizards with Jack Schwager $29.99 Live Audio CD from Traders EXPO seminar by The renowned “Market Wizards” author and Trader’s Hall of Fame award winner presents a powerful workshop highlighting the most common traits and techniques of the super traders. This rare session can help investors of all skill levels become market masters. Whether you’re an active trader, or simply want a better understanding of how to succeed in today’… |
|
|
BMV Quantum Subliminal CD Futures Trading Success: Successful Futures Trader (Ultrasonic Subliminal Series) $14.99 Program your subconscious mind to improve your trading skills and become a successful futures trader. Create life-changing results using state-of-the-art subliminal and brainwave entrainment technologies. Tune your brainwaves to specific frequencies by listening to this CD! Program your subconscious mind for positive lasting results, created by a Certified Hypnotherapist and NLP Practitioner (Neur… |
|
|
Ken Roberts’ TWMPMM: The Workshop Edition Videos (The World’s Most Powerful Money Manual/Futures and Options Trading Training) [6 VHS Videos/2 Commodity Charts] $395.00 Contains 6 VHS videos and 2 workshop education commodity charts. Ken Roberts, the world’s leading commodity educator. These six videos let you attend an exclusive workshop that promotes financial success and personal growth…. |
|
|
VHS Boosting Returns: New Twists to Time-tested Trading Techniques with Tom Gentile $64.95 Discover powerful twists to proven trading techniques that will help boost trading profits – in good or bearish markets. Tom Gentile’s comprehensive workshop, with online support manual, features an array of time-tested trading concepts and shows how adding his own, proprietary options strategies to these methods lets you boost returns, limit risk and profit from the directional moves. From his fr… |
|
|
Bust $1.99 … |
|
|
Broadway Melody of 1940 $8.65 One of the most famous tap numbers in film history distinguishes Broadway Melody of 1940, the fourth and final installment in MGM’s Broadway Melody series. When Clare Bennett (Eleanor Powell, who had appeared in Broadway Melody of 1936 and 1938) needs a new partner for her hit Broadway show, small-time hoofers Johnny Brett (Fred Astaire in his MGM debut) and King Shaw (George Murphy) get their bi… |
|
|
Japanese Candle Charting $29.77 Feel the scales drop from your eyes as you experience new depth of field from the basic price data that you’ve always used. If you want to maximize the reward/risk ratio of your trades, or if you think you have to dump bar charts and other Western tools for analyzing markets in order to use Japanese candle charts, think again. In this clear and concise presentation, market technician Steve Nison… |
|
|
Jean Patou Joy Body Lotion First launched in 1930, leading couturier Jean Pateau created Joy as a gift to American women who could no longer afford his clothes following the stock market crash of 1929. Joy celebrates the fragrance of memories – of the past and future. Size: 200ml ALL of our Brand Name Products are Boxed and are the AUTHENTIC name brand product! They are NOT testers…. |