Saudi Arabia: Saudi Arabia’s stock exchange will launch futures trading on single stocks on July 4, amid efforts to bolster liquidity and lure investors into the region’s biggest bourse.

It added that the first tranche of the futures contracts will include Al Rajhi Bank, Saudi Aramco, Saudi National Bank, Alinma Bank, SABIC, Saudi Kayan, Saudi Telecom Co., Saudi Electricity Co., Almarai, and Ma’aden. 

A single-stock future is a type of futures contract between two parties to exchange a specified number of stocks in a company for a price agreed today with delivery occurring at a specified future date.

The move will “enable local and international investors to hedge and manage portfolio risks more effectively as well as diversify products available for trading and hedging in the market,” Tadawul said in a statement.

Single-stock futures will be the second derivatives product on the Kingdom’s bourse, after the launch of index futures in late 2020.