The Saudi Exchange Tadawul has initiated the trading of single stock options (SSO), marking a significant expansion of its derivatives market. The new offerings, which began today, include American-style options that are physically settled for some of the kingdom's most prominent companies: Saudi Aramco (TADAWUL:2222), Al Rajhi Bank, stc, and SABIC.
This move is part of Tadawul's broader strategy to diversify the Saudi economy beyond its traditional oil base and to make the market more attractive to global investors and issuers. The SSOs will be cleared by Muqassa, aligning with international clearing practices.
Today's launch follows a series of developments in Tadawul's derivatives market, which began on August 30, 2020, with the introduction of MT30 Index Futures. The market further expanded on July 4, 2022, with Single Stock Futures. Now, with the addition of standardized single-stock options contracts for these select companies, traders have specific rights to trade underlying shares under predefined conditions.
The introduction of these derivative products is seen as a pivotal step in enhancing liquidity and providing new investment opportunities within the Saudi financial market. Tadawul has indicated plans to continue broadening its derivatives offerings in the future as part of its ongoing commitment to market development.
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