JSE launches new trading platform

Paves the way for new investment products

Saturday, December 10, 2011

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THE Jamaica Stock Exchange (JSE) last week rolled out an improved settlement and trading platform that will facilitate the provision of new investment products and services to the local market.


JSE general manager Marlene Street-Forrest said in a statement that the new Global Vision trading and Depend settlement systems will also allow for increased efficiency. She did not state specifically what the new products will be in the statement, but the JSE had said previously that it planned to introduce futures and options trading this year. In fact, the exchange has been conducting workshops in an attempt to build appetite for the trading of futures and options, two of the most common forms of derivative products.


Efforts by Sunday Finance to contact Street-Forrest were unsuccessful up to press time.


Futures and options offer greater diversity in trading and more opportunities as there are more financial products to trade. The introduction of a futures trading platform on the New York Exchange, for instance, resulted in an increase of over eight times the number of trades done before its introduction and 30 times the trade value.


A futures is a contract to buy or sell a commodity at a specified date in the future and at a specified price. This experts say can eliminate price risk as it locks in the price now that you will pay in the future. A futures contract gives the holder the obligation to buy or sell under the terms of the contract, whereas an option grants the buyer the right, but not the obligation, to do so. Therefore, the owner of an options contract may exercise the contract, but both parties of a futures contract must fulfil the contract on the settlement date. This is especially useful for commodity traders.


The JSE's new systems, which replaced a Nasdaq/OMX, Horizon and Equator trading and settlement platform, were acquired through licensing arrangements with Trayport and Percival, companies out of London England, which supports the Global Vision trading system and the Depend settlement system respectively. The new trading and settlement systems are currently used by Barbados and Trinidad Stock Exchanges.


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