Be prepared to trade in derivatives this year

NSE Chief Executive Officer Geoffrey Odundo(Left) with Richard Quest(2nd Left) Samuel Kimani(2nd Right) Chairman NSE,Mr. Bob Karina(Right) Vice Chairman during Nairobi Securities Exchange Opening Bell. [Wilberforce Okwiri, Standard]

The New Year’s gift from our exchange is trading derivatives since less risk would mean more safe investment. And the Nairobi Securities Exchange (NSE) are introducing new securities this year (2019). These new securities - Options and Futures is what academics and practitioners call derivatives.

The NSE defines derivative as a financial instrument whose characteristic and value of the underlying asset is typically a commodity, bond equity or currency. Whereas the issuer receives cash for financing projects for the case of securities such as bonds and equities, the that is not so in the case of derivatives.