Tadawul trading screen
The Saudi Exchange (Tadawul) is set to launch single-stock options contracts today, Nov. 27, 2023.
During the first phase, investors will be able to trade options contracts for the following four companies Saudi Aramco, Al Rajhi Bank, stc and SABIC. This list could be expanded to include other companies in the future.
On Aug. 30, 2020, Tadawul launched the first exchange-traded derivatives product — MT30 Index Futures, an index futures contract based on the MSCI Tadawul 30 Index (MT30), marking the beginning of derivatives trading in the Kingdom. The table below indicates all derivatives products in the Saudi capital market:
Derivatives Products in Saudi Capital Market
Product
Rollout Date
Futures Contracts Index (MT30)
Aug. 30, 2020
Single Stock Futures (SSFs)
July 4, 2022
SSOs
Nov. 27, 2023
Single-stock options contracts are standardized contracts with a single stock as its underlying asset. It derives its value from the underlying asset (shares) and provides its holder the right and not the obligation to sell or buy the assets at defined price and dates.
The following table illustrates details of the SSOs:
Details of SSOs
Item
Details
Contract code
Single Stock Options (SSOs)
Underlying share
Aramco, Al Rajhi Bank, SABIC, stc
Contract Size
100 shares
Minimum price fluctuation–tick
SAR 0.01 valued at SAR 1
Contract months
Current month, next month and the next two quarters
Option Exercises
Manual Exercise request can be entered by long position holder anytime between trade date and expiry date and all ITM and ATM request will be exercised
On expiry date, all ITM and ATM strike with open position will be automatically exercised and all OTM strikes will be rejected
On expiry date, Members can Deny exercise on any open positon and which will expire with zero value
Assignment allocation for every exercise request will be done on a random basis
Minimum number of strikes available
Minimum 4 ITM (in-the-money), 4 OTM (out-of-money) and 1 ATM (at-the-money) will be always available for trading. More can be added if underlying price moves significantly
Strike Prices
Underlying Price
Underlying Price
-25
-25
SAR 1
SAR 1
Exercise Type
American style
Exercise Settlement Price
Closing price of underlying (applicable to Daily Exercise request and Exercise on expiry date)
Option Trade Premium & Exercise Settlements
T+1 for Derivatives MTM (Option premium MTM and Exercise/Assignment MTM in Derivatives will be settled on T+1)
Settlement Type
Physically Settled. Exercise Date +3 (E+3)
Price Decimals
2
Negotiated Deals
Yes
Market Making
Yes
Trading Hours
Pre-open (Opening Auction): 9:00 – 9:30
Open (Continuous trading): 9:30 – 15:30
Contract Expiration
Third Thursday of the expiry month. If it is a holiday, then expiry will move backward to the previous trading day
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