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Single Stock Futures

NEXT Single Stock Futures are derivative instruments that give investors exposure to price movements on an underlying stock. Parties agree to exchange a specified number of stocks in a company for a price agreed today (the futures price). NEXT Single Stock Futures will initially be cash settled.

NSE Derivatives Market
Category of contract Single Stock Future
Underlying financial instrument

Single stock listed on the NSE

E.g. Equity Group Holdings Plc. – EQTY
System code Jun19 EQTY
Contract months Quarterly (March, June, September and December).
Expiry dates Third Thursday of expiry month. (If the expiry date is a public holiday then the previous business day will be used.)
Expiry times 15H00 Kenyan time.
Listing program Quarterly
Valuation method on expiry Based on the volume weighted average price (VWAP) of the underlying instrument for liquid contracts, and the theoretical price (spot + cost of carry) for illiquid contracts.
Settlement methodology Cash settlement.
Contract size

For shares trading below KES 100:

One contract equals 1,000 underlying shares.

 

For shares trading above KES 100:

One contract equals 100 underlying shares.
Minimum price movement (Quote spread)
Price Range Tick Size (KES)
Below 100.00 0.01
≥ 100.00 < 500.00 0.05
≥ 500.00 0.25

 
Initial Margin requirements As determined by the NSE Methodology.
Mark-to-market Explicit daily. Based on the volume weighted average price (VWAP) of the underlying for liquid contracts, and the theoretical price (spot + cost of carry) for illiquid contracts.
Market trading times

As determined by the NSE

09H30 to 15H00 Kenyan time

Market fees

 
Participant Percentage
NSE Clear 0.025%
Clearing Member 0.025%
Trading Member 0.10%
IPF Levy 0.01%
CMA Fee 0.01%
TOTAL 0.17%

 

The percentages indicated above will be used to calculate the fees based on the notional contract value.

Benefits of trading NEXT Single Stock Futures

  • Provide an effective and transparent hedge against unfavorable share price movements;
  • They are liquid and easy to trade instruments;
  • Positions in single stock futures allow investors to benefit from downwards or upwards movement of share prices; and
  • Investors can have exposure on share price movements without owning the underlying share.