The NSE derivatives market (NEXT) has recorded massive profits in the first quarter of 2020. For the period commencing 3 January 2020 to March 2020, the derivatives market offered significant returns due to the general market decline that allowed investors to profit from short positions.

For instance, an investor who deployed Ksh25 million in ABSA margin, generated an exposure of approximately Ksh 170 million, a net return of approximately Ksh31 million (126%) is generated on the short position.

Launched in 2019, the derivatives market intends to diversify investors’ portfolios, introduce liquidity in NSE, and offer alternative asset classes. In addition to low margin requirements, the derivatives market also offers investors lower trading fees.

NEXT clearing members are Stanbic Bank Kenya and Cooperative Bank of Kenya. The trading members are;

1. Sterling Capital Ltd (STER)
2. Faida Investment Bank Ltd (FINB)
3. NCBA Investment Bank Ltd (NICS)
4. AIB Capital Ltd (AIBC)
5. Genghis Capital Ltd (GENC)
6. Kingdom Securities Ltd (KING)
7. Standard Investment Bank (STIB)
8. NCBA Custody (NICC)

The contracts for the period under review are;