How It Works

Once a company is listed on ZAR X there is a central exchange where each company's or issuer's shares, which are called equities or securities, trade along with other issuers' shares. Willing buyers and willing sellers place orders on the ZAR X trading system. The aggregation and ranking of these orders defines the ‘market’ for a security. The highest ‘bid’ (purchase price) and lowest ‘ask or offer’ (sale price) becomes the “double”. Investors in the securities should thoroughly understand the difference between a Market order and Limit Order.

Market Order

A market order does not have a set price and is therefore executed immediately at the current ‘market’ price or last traded price. Markets can be highly volatile and therefore the price of execution may differ dramatically from the price at time of order entry. Those who use market orders are more concerned about the speed of the execution as opposed to the price.

Limit Order

A limit order does have a set price and therefore may only be executed at the set price; however, a limit order may never get executed because the market may move away from the set price. Those who use limit orders risk not having an order executed.

There are five easy steps to making a bid to buy or offer to sell:

  • Step 1: Decide which broker you want to use
  • Step 2: Send the broker your FICA to open your trading account
  • Step 3: Choose how to trade using the web or the ZAR X mobi app or call your broker
  • Step 4: Decide on which securities you wish to buy
  • Step 5: Put money into the designated ZAR X Nominees Trust bank account

The stock market in South Africa has a number of participants, these participants each perform different functions and each has different constituents. Understanding how they work together and compete against each other to create a more efficient marketplace will help make understanding more complex market concepts easier.


Investors in the stock market vary in their knowledge and experience from large institutional money managers to retail investors. The goal of all of these investors is the same – to generate returns from their investment. ZAR X facilitates information transparency in its market by aggregating and disseminating real-time information and operating its exchange platform for companies to provide financial and other corporate disclosure for investors.


ZAR X Market Particpants (Stockbrokers and Financial advisors / Brokers)

Market Participants range from fully-integrated investment banks to medium and smaller sized brokers with specialties in retail and institutional brokerage, corporate finance, registered professional trading and market making. .FAIS registered brokers and financial advisors may participate in the ZAR X market by executing client orders. Brokers earn revenues from commissions charged on orders, the bid (buy) and offer (sell) spread (the difference between what an investor is willing to buy and sell a security). Brokers often receive buy and sell orders that ‘match’ – meaning, someone is willing to sell a security for the same price someone else is willing to buy the same security. In this situation, brokers will execute the trade “internally” which is called a bookover. This is preferable for brokers because they receive commissions on both the buy-and sell-side of the trade.


Companies create and sell securities in the market to raise capital, complete an acquisition and/or allow shareholders to exit their investments. Companies may issue and sell shares on ZAR X pursuant to their capital needs. In the regulated market, companies must provide adequate disclosure either to ZAR X and the investing public in order to benefit from liquidity which follows transparency brought about in a regulated market place such as a stock exchange. Companies that provide high disclosure levels experience significantly greater levels of liquidity, improved price discovery, and more efficient trading.

How a Stock Exchange works