1. SINGLE STOCK FUTURE TRADING
Shaun van den Berg PSG Online: Head of Client Education _______________________________ James Boardman JSE Derivatives
Wednesday,23 May 2012

2. JSE PSG Online OVERVIEW Central Orderbook What are SSFs Terminology
SSFs versus Equities.
Risk
Trading Strategy
Pricing
Account Registration
SSF Simulator

3. JSE - A CENTRALISED MARKET

4. JSE – EVOLVING MARKETS
From this…

5. … where you could expect this…
JSE – EVOLVING MARKETS
… where you could expect this…

6. … to this. Quiet, calm efficiency
JSE – EVOLVING MARKETS
… to this. Quiet, calm efficiency

7. JSE - A LEVEL THE PLAYING FIELD

8. JSE - SSF GUARANTEE HIERARCHY

9. JSE - IT WAS EASY TO SAY NO…

10. JSE - CENTRAL ORDERBOOK
Introduced competition on rates
Now they all come to you, hoping for a yes…
Please?
Please?
You
Please?
Please?
Please?

11. JSE - SPREADS

12. JSE - SPREADS
R1.5
R1.5 R1
R99
R100
R101

13. ( ) Can’t compare absolute spread values between instruments
JSE - SPREAD COST
Can’t compare absolute spread values between instruments
Need to compare in percentage of exposure
Value will be in basis points
1 Basis point =
On average spreads on Top40 Futures are 25 Basis Points (
OFFER
BID )
= Spread% (
OFFER
BID ) 2

14. Parking tickets! Magnus de Wet James Boardman Rudolf Oosthuizen
JSE - CONTACT DETAILS
Parking tickets!
Magnus de Wet
James Boardman
Rudolf Oosthuizen
And that’s the very brief story of the JSE and the AltX market. Please feel free to ask any questions you might have and either myself or Noah Greenhill will do our best to answer them.

15. SSFs are contracts entered into between 2 parties
PSG - WHAT ARE SSFs
SSFs are contracts entered into between 2 parties
Right for the buyer to take delivery of that stock on the date of the contract’s expiry, a ‘deposit’, known as the initial margin is made and used as security
Close out or Roll positions
An SSF contract is made up of 100 shares geared at around 15%

16. Standardised contract SAFEX Partially matched orders simply expire!
PSG - SSFs EXPLAINED
Standardised contract
SAFEX
Partially matched orders simply expire!
Expire March, June, September and December
Including all relevant dividends and interest
Go long or Go short
Marked to market daily (MTM)

17. Underlying Going Long Going Short Closing a position Expiry date
PSG - TERMINOLOGY
Underlying
Going Long
Going Short
Closing a position
Expiry date
Initial margin
Variation margin
Rolling a position

18. Highly capital efficient Low brokerage Very liquid Earn interest
PSG - BENEFITS
Highly capital efficient
Low brokerage
Very liquid
Earn interest
Benefit from Corporate Actions
Cheaply diversify risk
Hedge your portfolio

19. PSG - SSFs OR EQUITIES Joe (Equity / Share Trader) John (SSFsTrader)
Joe is confident that Sasol Ltd shares will increase in the coming months.
He has R36,500 which she can invest.
Sasol’s share price is R365, therefore she buys 100 shares.
3 months later the price has increased by 10% so he sells his shares to make a R3,650 profit.
His return on his investment is 10%
John is confident that Sasol Ltd shares will increase in the oncoming months.
Sasol’s share price is R365, therefore he buys a Long Sasol SSF contract (JUN12 SOLQ).
The initial margin set by the broker is R4,950 which is paid by the buyer.
After 3 months the price has increased by 10% and the investor closes out his position and sells out of the Sasol SSF contract he is holding. His profit is R3,650
His return on his investment is 58%.

20. PSG - UNDERSTANDING RISK
Jack is an SSFs Trader
Jack is confident that Sasol Ltd shares will increase in the coming months.
Sasol’s share price is R365, therefore he buys a Long Sasol SSF contract – JUN12 SOLQ at R4 950 initial margin which is paid by the buyer
The Brent Crude price decreases by $10 a barrel which negatively impacts on Sasol’s share price, which drops to R335 per share
The SSF contract is made up of 100 underlying shares.
The margin call for Investor B to continue trading is 100 x R30 (R365 – R335) = R 3000 variation margin which needs to be paid in to keep the investors position open. He has now laid out R 7,950
After a month the share price continues to drop to R300. The investor chooses to close his position and must pay in a further
R 3,500 variation margin.
His total outlay is R 10,950 but he receives his Initial margin back, so his total loss is R6000 (-121.2%)

21. PSG - SSF PRICING
Interest payable is determined daily by the market maker in relation to the ruling SAFEX rates.
Interest will be paid on cash balances at a rate linked to the JSE Trustees rate.

22. 14% VAT on opening leg and 14% VAT on closing leg 0.912% total
PSG - SSF COSTS
Brokerage on the Central Orderbook is charged at 0.4% (excl VAT) of the value of the transaction.
14% VAT on opening leg and 14% VAT on closing leg
0.912% total
A booking fee of R60

23. Identify the candidate Wait for the breakout
PSG - TRADING STRATEGY
Identify the candidate
Wait for the breakout
Set a reasonable target price (TP)
Allow the share to retest
Know when your trade has failed
Exit at your price target (TP)
Be patient
Be disciplined

24. PSG - IDENTIFY THE CANDIDATE
The more times a share price has touched these areas, the more valid these levels are & the more important they become.
The longer these support & resistance levels have been in play, the better the outcome when the share price finally breaks out.

25. PSG - ENTRY AND EXIT POINTS
Once prices are set to close above a resistance level, a trader will establish a bullish position.
When prices are set to close below a support level, a trader will take on a bearish position.
The exit point itself should be set at a critical price level, e.g. Support & Resistance

26. PSG - ASCENDING TRIANGLESTP

27. Full day workshop (09h00 – 16h00) Fundamental Analysis & Investing
PSG - MARKETWORX
Mentored learning
Full day workshop (09h00 – 16h00)
Monday, 25 June 2012
Fundamental Analysis & Investing
Technical Analysis & Trading
Cost: R200

28. PSG - SIMULATOR TRADING
Click here
Submit your details
Login
Select your SSFSM account (top right)
Reset simulator
Select “New Order”

29. SSF ACCOUNT REGSITRATION
Click here

30. Copper, Gold, Platinum & Silver
SSF Margin
Initial margin
per
contract
Top 40 Shares ALSI & ALMI
Copper, Gold, Platinum & Silver
WTI Crude Oil

31. SSF Central Order Book ALSI – Most popular Top 40 Shares
Liquidity, Cheap,
Tight Spreads
Long & Short

32. SSF Order Book – ALSI Trade
2 point spread = R10 x 2 points = R20
Margin = R28 050
Exposure = R
Cost R25 per contract
R10 per point
100 points move = R1000
Buy
Moves 300 points up =
300 points move x R10 = R3 000

33. SSF Order Book – ALMI Trade
40 point spread = R1 x 40 points = R40
5 Contracts x R2 805 = R14 025
Margin = R2805
Exposure = R28 050
Cost R55 per contract
R1 per point
100 points move = R100
Buy
Moves 300 points up =
300 points move x R = R300 x 5 = R1500

34. SSF Simulator (SSFSM) Step 1 Select SSFSM Step 3 Click Reset Simulator
Check R

35. New Order (ALSI)

36. New Order (ALSI Buy) Step 1 Select Direction Step 4 Click Submit Order
Step 2 Enter
Contracts
Step 3 Enter
Price (R)
Example 1:
Buy (Long)
1 contract @

37. Trade History (ALSI Buy)
Select Trade History
Margin Movement

38. Financial History (ALSI Buy)
Select Financial History
Margin & Brokerage
R25
Margin = R28 050
Exposure = R
Cost R25 per contract
R10 per point
100 points move = R1000

39. New Order (ALSI Sell) Sell (Long Close) Moves up to 30 389
= 300 points move x R10 = R3 000
Step 1
Select
Direction
Step 4
Click Submit
Order
Step 2 Enter
Contracts
Step 3 Enter
Price

40. Trades History (ALSI Sell)
Profit or Loss
Margin Returned

41. Financial History (ALSI Sell)
Select Financial History

42. SSF Simulator - Portfolio
Select Portfolio
Example 2:
Buy
Moves down to
= 169 points move x R10 = R1 690 loss
(Margin Call)
Example 3:
Sell
Moves down to
= 300 points move x R10 = R3 000

43. New Order (Remgro Buy) Step 1 Select Direction Step 4 Click Submit
Step 2 Enter
Contracts
Step 3 Enter
Price (R)

44. Trade History (REM Buy)
Select Trade History
Margin Movement
Margin = R2 122
5 Contracts
5 x R2 122 = R10 610
Exposure = 5 x 100 x R = R65 750

45. Financial History (REM Buy)
Select Financial History
Margin & Brokerage
R309.03
Brokerage =
Exposure R x 0.47% (VAT incl) = R309.03

46. SSF Simulator - Portfolio
Select Portfolio
Exposure 5 x 100 x R = R65 750

47. New Order (Remgro Sell)
Step 1
Select
Direction
Step 4
Click Submit
Order
Step 2 Enter
Contracts
Step 3 Enter
Price (R)

48. Trade History (REM Sell)
Select Trade History
Profit or Loss
Margin Returned
Sell (Close) REMJUN12
contract
@ R142.00
Exposure = 5 x 100 x R = R71 000

49. Financial History (REM Sell)
Select Financial History
Brokerage
&
Profit
Brokerage = R x 0.47% (VAT incl.) = R
Profit =
R – R65 750
= R5 250

50. Educational enquiries
SUPPORT
General enquiries
0860 PSG PSG ( )
Trading assistance
Lawrence Marshall
Educational enquiries

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52. Thank You shaunvdb@psgonline.co.za 011 996 5200