Saudi Exchange Announces Launch Of Single Stock Futures

The Saudi Exchange announced today its intention to issue Single Stock Futures (SSFs) contracts, the Saudi Exchange's second derivatives product.

Photo Insert: Riyadh is the financial of hub Saudi Arabia and is where the Saudi Exchange is located.

The new contracts will be ready for trading on July 4, 2022, allowing local and foreign investors to hedge and manage portfolio risks more effectively, as well as diversify products available for trading in the market.

SSFs contracts are ordinary futures contracts with an underlying asset of a single stock. The underlying equities were chosen from the Saudi Exchange's largest and most liquid companies. SSFs, like other cash market products, are traded on the Exchange.

Securities Clearing Center Company "Muqassa" will clear and settle SSFs contracts in accordance with international best practices.

"We are excited to introduce the second derivatives product to the Saudi Exchange, as we continue to deliver on our commitment to providing a sophisticated and innovative range of products and services to local and international investors," said Mohammed Al Rumaih, CEO of Saudi Exchange.

He added, "The launch of SSFs contracts further supports the advancement of the Saudi Capital Market by creating diversified offerings, complemented by hedging tools to manage risk and limit losses in adverse market conditions."

SSFs are available to all investors through a registered Derivatives member.

Al Rajhi Bank, Saudi Aramco, Saudi National Bank, Alinma Bank, SABIC, stc, Saudi Kayan, Saudi Electricity, Almarai, and Ma'aden are among the ten underlying assets of the SSFs contracts. The stocks are chosen based on a set of criteria designed to assure market liquidity, market integrity, and effective portfolio management, trading, and hedging opportunities.

In 2020, the Saudi Exchange launched the Derivatives Market, with plans to provide other derivatives products such as Single Stock Options.

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