Trading in futures allowed for all investors with 20% fluctuation limit: Al Hussan

The fluctuation limits for futures contracts will be at 20% of the previous day closing price, Khalid Al Hussan, CEO of Tadawul, told Argaam.

In a virtual meeting held by Tadawul and the Securities Clearing Center Company (Muqassa) to announce the launch of the derivatives market, Al Hussan said that the maximum number of contracts execution (in favor of investor) will be 10,000 per transaction.

He further indicated that Muqassa has the flexibility to increase the available number of contracts to be traded by investors based on its vision.

The trading of index future contracts will start on the MSCI Tadawul 30 (MT30), Al Hussan said, adding that the trading of additional contracts from other indices will be studied upon request, as it will be easy to launch them.

He clarified that trading future contracts will not affect the MT30 index, indicating that the movement in the index’s value differs from the movement in the contract price.

“Trading in future contracts is allowed for all investors,” the CEO stressed.

On the other side, CEO of Muqassa, Wael Abdullah Al Hazzani, reported that the launch of the derivatives market and the activation of Muqassa’s role to clear these future contracts, are considered the first phase in the stock market’s expected developments, which will start in August 2020.

Moreover, the second phase will focus on Muqassa’s activation and its overall improvements in the trading and settlement system in the stock, bond and REITs market.

The third phase will witness the completion of the derivatives market system and its related products, especially options contract, that will be launched by the end of 2021 or the beginning of 2022.