by Cape Media Corporation

Video: Graham Smale is a JSE director

Optimising your trading

The Johannesburg Stock Exchange (JSE) is arguably South Africa's finest performer in recent years, providing a vibrant platform for investors to operate on various levels, whilst being a Blue Chip share in its own right. So how to make best use of this juggernaut?

We invited Graham Smale, director of bonds and financial derivatives at the JSE to explain the best way to use the equity derivatives market to hedge equity market trade.

Historically the primary function of the equity derivatives market has been to hedge equity market trade through the various vanilla derivatives products listed on this market.

While this is still largely the case, in recent years the market has moved on from this primary function.

Today, a wide variety of products are available to use as tools for hedging, speculating and arbitrage purposes.

In the face of demand for more sophisticated products, the JSE has been innovative in terms of creating bespoke products that meet client needs and manage other forms of risk.

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Issue 42