• currency futures

Currency Futures

Currency Futures Contracts are a great addition to any portfolio, an alternative to manage your currency risk as well as great instruments in which to speculate price movement making short-term profits. Currency Futures are listed on the Johannesburg Stock Exchange (JSE).  
A currency future contract is an agreement between two counterparties, where one commits to buy (long) the underlying exchange rate and the other to sell (short) the underlying exchange rate at a pre-determined price on a specified date in the future. The underlying instrument of a currency future contract is the rate of exchange between one unit of foreign currency and the South African Rand (ZAR). 


Our team of dedicated consultants at Intrepid Capital have the knowledge and experience to easily manage this process for you, allowing you to focus on your core-business, while we handle your currency risk.


BENEFITS TO TRADING WITH CURRENCY FUTURES 

  • Individuals and smaller corporates get increased access to favourable rates generally reserved for large institutions and corporates.
  • Reduced administration (no reporting required by South African Reserve Bank).
  • Increased flexibility and lower costs as opposed to OTC or spot market. A trader can exit their position before the expiry date which allows for active trading to be adjusted with little cost.
  • Gearing is available for the use of borrowed capital, to increase the potential return of an investment. By trading in currency futures the investor is paying a percentage of the value, known as the initial margin, instead of the full traded value (notional amount).
  • Hedge: Currency futures can be used to hedge against currency risk
  • You can take advantage of price movements. Currency futures enable investors to speculate on the short-term movement in the markets. For example, investors that have a view on the movement of the underlying exchange rate can increase their exposure. This means they can profit from short-term price movements with the belief that the currency rate will change.

RISKS INVOLVED WITH TRADING CURRENCY FUTURES

  • The main risk associated with currency futures is the effect of gearing

Gearing refers to the ratio between the portfolio value (initial margin and free cash) at any point in time relative to the exposure to the underlying currency.

 

As a result of gearing the profit and losses on a position can be more than the initial margin posted. If a margin call cannot be met (client short of funds), the broker may close the position.

By working with Intrepid Capital, we counsel our clients to help mitigate their currency exposure and / or  take advantage of price movements.  


AVAILABLE CURRENCY FUTURES CONTRACTS:

  • US Dollar / Rand
  • Euro / Rand
  • Dollar / Euro
  • British Pound Sterling / Rand
  • New Zealand Dollar / Rand
  • Australian Dollar / Rand
  • Japanese Yen / Rand
  • Chinese Renminbi / Rand
  • Swiss Franc / Rand
  • Canadian Dollar / Rand
  • Botswana Pula / Rand
  • Zambian Kwacha / Rand  

 

BY WORKING WITH INTREPID CAPITAL, WE CAN OFFER YOU:

  • Real time online trading
  • Real time profit and loss statements / reports
  • Competitive brokerage fees
  • Ability to enter, cancel and amend orders online
  • Live streaming prices
  • Intraday graphs on currencies
  • Live portfolio values and exposure
  • Trade and price alerts via email and/or SMS

For more detailed information about Currency Futures Contracts, please download our complete brochure here.

For more information on how Intrepid Capital can help you, please email info@intrepidcapital.co.za call us on 011 234 6570 to have a conversation with our team.