The JSE said on Monday it had started trading rand-dollar currency options, which should increase volumes and liquidity in the local currency market.
The JSE launched rand-dollar currency futures trading in June last year and added euro and sterling contracts in October.
Warren Geers, general manager of trading at the JSE, said the currency futures market recently broke through the R18-billion mark and the currency options would boost the market.
Currency futures are derivative contracts that allow investors to trade the underlying exchange rate for a period of time in the future, while options give the investor the choice not to exercise the contract if the rate is not in his favour.
”Due to their flexibility, currency options are considered one of the best ways for corporate, the agricultural community and individuals to hedge against adverse movement in the exchange rate,” the JSE said in a statement.
Geers said the JSE expected a great response from the agricultural sector and from institutional investors. — Reuters