For people wishing to start trading futures, the following guide will take you through the various steps involved in setting up a futures trading account with Signal Futures:

On completion of the SAFEX registration form, you will be allocated with a SAFEX trading code. As A client of Signal Futures you will be registered with SAFEX and the Clearing House, ABSA.
Each of these steps and the associated forms are discussed below. It is advised that you read this guide in conjunction with the corresponding forms.

(1) Registering with SAFEX

The South African Futures Exchange (SAFEX) is the only exchange in South Africa on which futures may be traded. In order to trade futures, you or your company needs to be registered with SAFEX. To do this, clients will need to complete the SAFEX (JSE Client Agreement form). .

Clients should only indicate “Yes” under the Discretionary managed client section if their account is to be managed entirely by Signal Futures and the client does not intend to actively partake in trading.

Clients who wish to use offshore vehicles (non-rand currencies) or who have foreign residence should tick the “Non-resident client” box or the “Emigrant client” box. All other clients should tick the “Resident Client” box. Clients who tick the non-resident box will also need to fill in their bank details on the second page of the Registration form.

It is important for clients to indicate how they would prefer to receive their client advice notes. Clients should tick the appropriate box on the registration form.

On completion of this form, fax it through to Signal Futures and we will register the account. You will be issued with an individual client code against which SAFEX will allow you to trade.

Completed copies of the SAFEX Registration Form can be sent to Signal Futures via one of the following methods:

(2) Online Trading through Signal Futures

Once you have completed and submitted all the forms and you have received a Client Code from SAFEX, you will need to deposit trading funds into your allocated account at ABSA to begin trading. PLEASE NOTE THAT TRADING CAN ONLY COMMENCE ON RECEIPT OF A COPY OF THE DEPOSIT SLIP OR ELECTRONIC TRANSFER CONFIRMATION.

These funds will serve as the margin needed to secure any open positions that you may hold. The margin requirements vary for different instruments, but it is recommended that you keep more than the minimum margin requirement in your account to ensure that the daily revaluation of your positions does not result in a loss that may result in a call for you to add margin to your account.

To trade through Signal Futures, you can either contact a dealer over the telephone who will conduct your trade for you, or you can load Signal Futures’ online futures trading software onto your PC and conduct your own live trades.

Telephonic trades can be conducted through our Cape Town office by dialing one of the following numbers:

Signal Futures's online trading application can be downloaded from www.estuarysolutions.com or it can be e-mailed to clients. Clients wishing to use the online trading system can download the OTS User Manual. This manual will guide users in the setting up of the programme and the configuration of it. People wishing to use the online trading application as a trading medium will need their details to be added to the OTS Server at Signal Futures. Users should contact Claudia Coné to have their details added to the Estuary Server so that their account can be verified when they log on.

It is vital for users of the online trading application to read the disclaimer on www.signalfutures.co.za before they begin trading for their own account.

(3) Payment procedures

Trading futures requires you to keep the minimum margin requirement per futures contract in your account at ABSA. This serves to protect yourself and your broker against the largest perceived movement in the price of the futures contract on one day. Margin requirements vary for different futures contracts. Your broker will be able to provide you with the margin requirement for each of the different contracts that are traded on SAFEX. For example, the margin requirement for the near ALSI contract is R 7000 per contract.

The value of your position in the market is recalculated each day at 17:00 through a process called mark-to-market. This process revalues your position at the market price of your contract at 17:00. This could result in a theoretical increase in the value of your position if the market moves in your favour, or a theoretical decrease in the value of your position if the market moves against you. Should the market move against you to the extent
that the theoretical value of your position drops below the minimum margin requirement for your position, you will receive a margin call. This is a call for you to add money to your account at ABSA to bring your account balance into line with the minimum margin requirement.

An example of this is as follows:

You hold R7500 in your account at ABSA futures. You decide to sell short the near ALSI future at 6990 at 14:00 on Wednesday. At 17:00 on Wednesday, you are still holding your position and the near ALSI future is trading at 7060, meaning that you are 70 points out of the money, or R700 excluding costs. Deducting the theoretical R700 loss from your initial account balance of R7500 leaves you with a mark-to-market balance of R6800. This is R200 less than the required minimum margin requirement of R7000 on the near ALSI future. If you don't close your position before market close on Wednesday, you will receive a margin call on Thursday morning. This will be a call for you to deposit at least R200 into your account to bring your account balance back into line with the minimum margin requirement of R7000.

This money needs to be deposited into your ABSA futures' account before 11:30am on the morning when you receive a margin call.

You will need to deposit your funds into the following bank account:

The reference number that you will use on the deposit slip or internet banking will be your Account number supplied by Signal Futures.