Step 1 – What do I need in place?

You need to be a Global Trader client

In order to open an account you need to:

• Process an application form >
• Accept our terms and conditions >
• Provide us with all necessary documents to satisfy FICA >

Step 2 – How much do I need to insure?

• Get a recent valuation of your JSE stock portfolio and decide what percentage of this you want to insure (E.g. 100%)
• Pass this value on to our sales team who will prepare a quote for you.
• If you are concerned that your JSE portfolio does not track the ALSI40, then provide us with your portfolio and we will evaluate your portfolio correlation to the ALSISURE

Step 3 – How can I get a rough idea of the costs?

Divide the market value you want to insure by R250 000 and multiply the outcome by R8000.

E.g. assuming a value of R500 000 your approximate 6 month ALSIURE cost would be 500 000 / 250 000 x R8000 = R16 000

Step 4 – How is the ALSIURE contract entered into?

Assuming your account is open and funded and you require 2 ALSISURE contracts to insure your portfolio, Global Trader will deduct R16 000 from your account as a premium cost and enter you into 2 contracts of ALSISURE.

Step 5 – Can I see what the value of my ALSIURE contract is on any given day?

The ALSIURE contract will be displayed on your account with Global Trader.

You can either receive a valuation by calling our trading desk or alternatively, log in to your platform and view the contract value online in real time.

Investors who are uncertain about the market direction over the next 6 months and want protection

Bullish investors who want some downside protection should they be wrong.

Bearish investors who cannot exit their equity portfolios

Bearish speculative investors who believe the market will drop by more than 3.2% over the period

The SA Top 40 increases over the contract period and expires above your ALSISURE strike price 

Outcome

You would have incurred the cost of the premium (3.2%)

Your ALSISURE  contract would expire at a price of 0 and therefore at a value of ZERO

Your underlying JSE portfolio would have increased in value over the period

Outcome

You would have incurred the cost of the premium (3.2%)

Your ALSISURE  contract would expire at a price equal to the difference between your ALSISURE strike price and the SA Top 40 closing price on the 15th December 2010.

E.g. Assuming a strike of 25000 and an expiry price of 23500, the expiry price of your ALSISURE would be:

25000-23500 = 1500.

This would result in an expiry value of the price x contract value:

e.g. 1500 x R10 (1 ALSISURE) = R15 000

Your underlying JSE portfolio would have decreased in value by a similar value (depending on your portfolio correlation to the SA Top 40) to the expiry value of your ALSISURE contract. E.g. +R15 000 (ALSISURE Value) – R15 000 JSE portfolio = nett gain  of ZERO

Outcome

Your ALSISURE  contract would expire at a price equal a 7% decline

E.g. Assuming a strike of 25000 the expiry price would be 25 000 x 7% = 1750.

This would result in an expiry value of the price x contract value e.g. 1750 x R10 (1 ALSISURE) = R17 500

The current listed ALSISURE strikes are listed on our Future Trader platform. New strikes will be added as the market moves.

The contract is priced in real time, providing real time valuations on your ALSISURE contract

The contract cannot be traded online and must be entered into via the trading desk.

Trading desk: We're open from 6h00am until 10h15pm (SA time)

+27 11 214 8101 for Futures Trading  

The underlying for the ALSISURE is the South Africa Top 40 Index

No margin is required to enter into the contract