Pakistan Stock Exchange (PSX) has decided to introduce Single Stock Options in the second half of 2017. Stock option is a privilege where one party sells stock, giving the buyer rights (without any obligation) to buy or sell it at any agreed price within a certain period of time.
Additionally, PSX’s website will also be updated with Urdu and Chinese language options.
Single Stock Options
PSX, in a notification, stated that
With the launch of Single Stock Options, it is expected that ready market volume shall increase by two to three times as derivative volumes in India were at-least five times higher within 2 years launch of derivatives.
It will add depth to the market and allow investors to leverage positions for large diversified portfolios when the Single Stocks Option is launched in the third quarter this year. PSX aims to provide competitive, liquid, orderly markets for the purchase and sale of standardized options.
All option contracts for PSX will be issued and cleared by the National Clearing Company of Pakistan Limited (NCCPL).
Options traded on PSX will be regulated by the Securities and Exchange Commission of Pakistan (SECP). Currently, the Regulations Governing Index Options are approved by the SECP. The application software is ready for deployment and launch of index options, however, considering market sentiments, PSX is working to first bring depth in Single Stock Futures and then introduce Single Stock Options.
This is expected to pave the way for the introduction of new systems, technologies, products and investors and help develop the local capital market.
New Website Design
On the other hand, PSX has launched an initiative where its website will be upgraded to cater to the influx of new investors. It will now target local as well as the Chinese audience which is interested in investing in PSX and looking for relevant information on the exchange’s website. The website will allow visitors to choose between Urdu, English and Chinese language options.
It is expected that with its new outlook and multi-lingual interface, the website’s advertisement revenues will increase by 10 times.