Currency Futures are listed instruments that allow you to maximise exposure to foreign currency movements with minimum capital and without having to use your offshore allowance.
Currency futures contracts allow you to benefit from the movement in the currency futures rate between the rand and several major international currencies.
Trading Currency Futures
The value of the contract will equal 1000 units of the underlying currency in the contract, at its futures rate. But you do not have to pay the full price of the futures position. You only need to pay enough money into your trading account to cover the initial margin, which is a fixed rand amount per contract (usually around 10% of the futures position). This means that you get more market exposure than you're paying for.
- You get access to favourable currency futures rates, usually reserved for larger corporate clients.
- A 'long' position involves buying currency futures to sell at a later stage, if
you think the currency will appreciate.
- A 'short' position involves selling currency futures to buy back at a later stage, if
you think the currency will depreciate.
- If you buy and sell currency in pairs (e.g. buy dollar and sell rand), you can hold both 'long' and 'short' exposures and can make money when exchange rates move up or down.
- Your initial margin is always kept separate and cannot be withdrawn from your currency futures trading account.
- A daily mark-to-market process and daily statements let you track your profit or loss situation and adjust your portfolio accordingly.
- Once the position has been closed out, settlement occurs in rand.
List of available currencies
The currencies available to trade against the rand on the Johannesburg Stock Exchange's Currency Futures Exchange are:
- US Dollar
- British Pound
- Australian Dollar
- Japanese Yen
- Canadian Dollar
- Swiss Franc
Each currency future is unique and comes with its own associated risks, including volatility. This might not be a suitable investment for all investors and will depend on your risk appetite and the time you have on hand to watch the currency markets.
Get the Currency Futures Key Information Document.
It is advisable to educate yourself about currencies and the principles of trading. You can start by watching our
tutorials, or can consider our seminars and webinars
For more information on how to invest or visit our FAQ page.
Start maximising your exposure to foreign currency movements and register for an online trading account.
To contact our team of currency future traders directly, call 0860 774 774 or