The Saudi Exchange (Tadawul) has announced the launch of single stock options (SSOs), a futures trading contract, for Saudi Arabian Mining Co. (Maaden).
The contracts will be cleared by the Securities Clearing Center Co. (Muqassa) and launched on April, 21, 2024, the exchange said in a statement on Thursday.
SSO is a derivatives contract that allows investors to buy or sell a stock at a fixed priced on a future date. The launch of single-stock futures trading is part of the Kingdom’s broader strategy to diversify its economy away from oil.
The contracts are expected to enable local and international investors to effectively hedge and manage portfolio risks as well as diversify products available for trading in the market, Tadawul said.
The Saudi Stock Exchange launched SSO contracts in November 2023, with the first batch of SSOs having the stocks of Aramco, Al Rajhi Bank, Saudi Telecommunication Company (STC), and SABIC as underlying assets.
SSOs grant holders the right to sell or buy a base asset at a set price and date, without obligation.
