Riyadh, Saudi Arabia – The Saudi Exchange on Sunday announced its intention to launch the Single Stock Options (SSOs) contracts, the third derivatives product to be introduced in the Saudi Exchange.
SSOs contracts will be available to trade on 27 November 2023, enabling local and international investors to hedge and manage portfolio risks effectively. SSOs contracts will be cleared and settled by the Securities Clearing Center Company (Muqassa) in line with international best practices.
SSOs contracts are standard options contracts with an individual stock as its underlying asset. Four underlying assets have been selected from the largest and most liquid companies listed on the Saudi Exchange which are: Aramco, Al Rajhi Bank, STC, and Sabic. In the futures, the Saudi Exchange will expand its suite of SSOs contracts to include additional companies.
The Saudi Exchange will launch physically settled American options, which are a type of financial contracts that require the actual delivery of the underlying asset that can be exercised at any time prior to expiration.
“The launch of SSOs, the third derivatives product, reinforces the Saudi Exchange’s efforts to providing investors with diversified investment opportunities and tools to manage risk effectively, while increasing market liquidity,” Mohammed Al Rumaih, CEO of Saudi Exchange, said. “The Saudi Exchange continues to explore the introduction of new products and services to the Saudi capital market in line with efforts to align it with international best standards.”
The Saudi Exchange launched the Derivatives Market in 2020, and has since introduced three derivatives products, including MT30 Index Futures (SF30), Single Stock Futures, and now Single Stock Options.
The Saudi Exchange is the authorized entity in the Kingdom of Saudi Arabia to act as the Kingdom’s securities exchange (the Exchange), listing and trading in securities. The Saudi stock market is the 9th largest stock market among the 67 members of the World Federation of Exchanges and is the dominant market in the Gulf Cooperation Council (GCC). The Exchange is the 3rd largest stock market amongst its emerging market peers.