Tadawul trading screen
The Saudi Exchange (Tadawul) will launch single stock options (SSOs) contracts today, Nov. 27.
Underlying shares are 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 |
|
Index Futures (MT30) |
Aug. 30, 2020 |
|
Single Stock Futures (SSFs) |
July 4, 2022 |
|
SSOs |
Nov. 27, 2023 |
SSOs give holders the right but not the obligation to buy or sell an underlying asset at an agreed upon price and date.
The following table illustrates the 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 at any time between the trade date and expiry date and all ITM and ATM requests will be exercised On the expiry date, all ITM and ATM strikes with open position will be automatically exercised and all OTM strikes will be rejected On expiry date, members can deny exercise on any open position, which will expire with zero value Assignment allocation for every exercise request will be done on a random basis
|
|
|
Minimum number of strike prices available |
Minimum 4 ITM (in-the-money), 4 OTM (out-of-money) and 1 ATM (at-the-money) will always be available for trading. More strikes will be added if the underlying price moves significantly |
|
|
Strike Prices |
Underlying Price |
Strike Price Intervals |
|
0-25 |
SAR 1 |
|
|
25-50 |
SAR 2 |
|
|
50-100 |
SAR 5 |
|
|
100 |
SAR 10 |
|
|
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) |
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|
Settlement Type |
Physically Settled. Exercise Date +3 (E+3) |
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|
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 the expiry will move backward to the previous trading day |
|
|
SSOs Price |
|
|
Contract |
Settlement Price* |
|
Aramco |
7.54 |
|
stc |
8.10 |
|
Al Rajhi Bank |
20.49 |
|
SABIC |
0.46 |
*Contract is equivalent to 100 shares
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