Derivatives

The launch of the Derivatives Market is one of the Financial Sector Development Program (FSDP) key initiatives under the Kingdom’s Vision 2030. This market enhances Saudi Exchange’s products offering and complements recent developments to the financial market infrastructure. Below you will find more information about the market characteristics. Additionally, we have provided some useful links that will direct you to more educational content.

Video Resources

Key Links

Reference Links

• What is the first product available for trading?
• What is MT30?

Exchange Traded Instruments

*Excludes brokerage fees

Negotiated Deals:

Negotiated Deals occur when both sellers and buyers determine the quantity and price of the Listed Derivatives Product contract involved in the transaction.

Derivatives Market Features

Opening Price:

Open of the market takes place by an auction for Futures or Options Contracts. The auction shall be based on the bids and asks entered during the Opening Auction. 

Closing Price:

Last Traded Price

IntraDay:

Matching takes place based on price and time priority.

Daily settlement price :

The Daily Settlement Price of the Futures or Options Contracts is calculated based on a methodology determined and disclosed by the Exchange in the Listed Derivatives Products Specifications on the Exchange's website.

Theoretical Future Price calculation:

Where:

Spot - Spot/underlying price
r - interest rate
TTE - time to expiry in years

Final settlement price:

The Final Settlement Price of the Futures or Options Contracts is calculated based on a formula determined and disclosed by the Exchange in the Listed Derivatives Products Specifications on the Exchange's website.

Tick Sizes:

Minimum price fluctuation of the Futures Contract will be specified by the Exchange in the Listed Derivatives Products Specifications on the Exchange's website.

Order Types:

• Limit Order
• Market Order

Order Conditions:

• Fill or Kill (“FoK”) 
• Fill and Kill (“FaK”) 
• Hidden Quantity 

Order Validity 

• The First Session
• Day
• Good till Cancelled (“GTC”)
• Good till Date (“GTD”)

Minimum Trade Size:

One Contract

Settlement type:

Cash Settlement: Does not require delivery of the underlying instrument upon exercise. 

Physical Settlement: Requires delivery of the underlying instrument upon exercise

Exercise type:

American style: Options contracts can be exercised any time before the expiration date.

European style: Options contracts can only be exercised on the expiration date. 

Options type:

Call Options: gives the right, not the obligations to the buyer of the Call Options to buy the underlying asset and require the seller to sell the underlying asset upon request by the buyer of the Call Options at the Strike price for the duration of the Options contract. 

Put Options: gives the right, not the obligations to the buyer of the Put Options to sell the underlying asset and require the seller to buy the underlying asset upon request by the buyer of the Put Options at the Strike price for the duration of the Options contract. 

Fluctuation Limits:

Derivatives Underlying :

Contract Months and Year Code:

Example of Futures contract code would be: (Contract Code + Futures + Expiry Year + Expiry Month)

Index Futures: (SF30 + 3 + M )

Single Stock Futures: (ARM + F + 3 + M)

Example of Options contract code would be: (Contract Code + Options+ Expiry Year + Expiry Month + Strick Price + Call/Put )

Single Stock Options: (RJH + O + 3 + M + 130 + C/P)

Corporate action codes:

In case of corporate action, the long name of contracts post Corporate action will contain the below codes in the following sequence:

Accessibility by Market participant

‘Onshore’ investors

Post-trade features

Trading Cycle and Times

Trading Cycle

• Step 1: Buyers and sellers submit orders via the member where their accounts are maintained. This may be achieved through one of the channels provided by the member which includes, but not limited to, electronic trading platform. These orders represent the agreement between the member and the investor to execute a specific business transaction as per the investor order.
• Step 2: Orders are entered into the member’s Order Management System (OMS). In accordance with market conditions and the requirement of the investor, the orders within the bank’s OMS are forwarded to the Saudi Exchange via a high-speed network.
• Step 3: Saudi Exchange attempts to match orders according to price and time priority. A variety of order types and special terms are available to the trader. Unmatched orders are maintained in Saudi Exchange until they are matched, canceled or expire.
• Step 4: For matched orders, trades are generated and reported electronically to Muqassa.
• Step 5: The execution of the buy and sell orders that together form a trade; consists of one or more contracts and occurs when the same price is specified by buy and sells orders, for a specified number of contracts.

Trading Time

Trading Days: One session, Sunday through Thursday except official holidays

Official Holidays in the Kingdom of Saudi Arabia are:

• National Day of Saudi Arabia (23 September).
• Eid Al-Fitr and Eid Al-Adha.
• Founding day of Saudi Arabia (22 February)

Market will be closed during these holidays and announced on Saudi Exchange website

Derivatives Exchange Membership Fees

Position limits