Browsing: NSE Derivatives Market (NEXT)

By Terry Adembesa, Chief Officer, Derivatives Market, Nairobi Securities Exchange

A derivative contract is an agreement to engage in a commercial transaction in which the delivery of an asset is set for the future, while the price and various specifications of the contract are agreed at the time of contract initiation. These markets originated from burgeoning oil and grain markets. In the agricultural markets, these created a need for a farmer to secure a price at one point in time, store the grain, and deliver it at a later point in time.

Despite these markets initially being dominated by agricultural commodities, globally there has been a proliferation of other financial instruments such as currencies, bonds, and stock indices. Although the commodity derivatives markets include very active contracts in oil and precious metals, financial derivatives have remained the most traded instruments in the global derivatives markets.

Types of derivatives include forward …

Investors are keen on new developments at the Nairobi Securities Exchange (NSE) as the market opens its counters for derivatives trading.

The NSE Derivatives Market (NEXT) futures start trading today with the official launch of the market slated for Thursday, July 11, 2019.

“NEXT provides new opportunities to investors, enabling them to better diversify their portfolios, manage risk, and deploy capital more efficiently,” NSE Chief Executive Geoffrey Odundo said.

Futures contracts provide investors with risk management tools in the wake of unexpected volatility in asset prices.

READ:NSE gets green light for Derivatives Market

NEXT will also enable Kenya to consolidate its position as a leading financial services hub offering a wide variety of investments products.

The  NEXT will commence with index futures and single stock futures on selected indices and stocks respectively, the bourse’s management said.

The Exchange will initially offer index futures contracts on the NSE25 Share Index …