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 Contracts. The auction shall be based on the bids and asks entered during the Opening Auction. The market will open and uncross on a variable basis between 09:30:00am and 09:30:30am every trading day.

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 Contracts is calculated based on a methodology determined and disclosed by the Exchange in the Listed Derivatives Products Specifications.

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 Contracts is calculated based on a formula determined and disclosed by the Exchange in the Listed Derivatives Products Specifications.

Tick Sizes:

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

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

Fluctuation Limits:

Derivatives Underlying :

Contract Months and Year Code:

Example of contract code would be: (Product Code + Expiry Year + Expiry Month) (SF30 + 1 + F )

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

Settlement Cycle (T+0)

What is meant by settlement of derivatives contracts?

To debit or credit on a daily basis a margin account based on the close of that day's trading session. The buyer and seller are then aware of the risk of their portfolios and margins, if any. Cash settlement takes place when buyers and sellers contracts are settled against the final settlement price by crediting and debiting their respective accounts with profit or loss.
A T+0 Settlement Cycle means that the Contracts are Marked to Market on a daily basis.

Position limits