The Saudi Exchange (Tadawul) launched on Monday single stock options (SSOs) contracts, the newest offering in its derivatives market.
The new offerings include American-style options that are physically settled for some of the Kingdom’s most prominent companies: Saudi Aramco, Al Rajhi Bank, stc and SABIC.
In remarks to Asharq Al-Awsat, financial analysts described the launch of the SSOs contracts as a move towards developing the Saudi financial market, diversifying its investment tools and channels, and attracting capital, major investment companies, and foreign investors to the Saudi market.
CEO of Razeen Capital Mohammed Al-Suwayed said options contracts were very important in attracting additional capital to the Saudi Exchange, and helping long-term investors protect their investments and increase methods of controlling financial market risks.
Financial analyst Abdullah Al-Jabali,noted that the SSOs contracts would contribute to the development of the Saudi financial market and its investment tools, and expand the base of channels for investors.
He added that the Capital Market Authority’s selection of four of the largest and most heavily weighted companies in the market for the SSOs contracts confirms the Authority’s keenness on the importance of this investment tool and the necessity of its use by trading and investment professionals in the financial and stock markets.
In a statement, Tadawul announced that SSOs contracts will be available to trade as of Monday, in which investors can trade SSOs on four listed stocks as their underlying assets.
It added that SSOs contracts were the third derivatives product to be introduced in the Saudi Exchange and will be cleared by the Securities Clearing Center Company “Muqassa”.
The first tranche of SSOs will be based on the following listed companies: Aramco, Al Rajhi Bank, Saudi Telecom Co. and SABIC.
