Stock Options Unveiled at TSE
Stock options were unveiled for the first time on Tehran Stock Exchange on Sunday.
Options are contracts that allow you to buy the right to sell or buy a security or a commodity at a future date, and along with other financial instruments that fall under the "derivatives" umbrella term, are a vogue these days with Iranian regulators.
Regulators are seeking the introduction of sharia-compliant derivatives to expand investment tools available to money managers and add gusto to Iranian financial markets, Bourse Press reported.
Call options for Mobarakeh Steel Company, National Iranian Copper Industries Company and automaker IKCO were unveiled at Sunday's official ceremony.
Shapour Mohammadi, the head of Securities and Exchange Organization, who attended the ceremony said put options will soon follow.
The offering of options on stocks comes four days after option contracts for gold coins started trading on Iran Mercantile Exchange.
Gold coins, which are the benchmark for gold investment in Iran, already have a booming trade in futures contracts on IME. IME gold futures were introduced in 2007.
Both the options on gold coins and the ones on stocks will be European-style options, meaning they can only be exercised at expiration, contrary to American-style options that can be enforced any time from their sale up to the contract's expiration.
No leverage has been offered yet but Mohammadi says the required margin for buying the contracts will be lowered.
"The options will first be traded through brokers via written orders, but their online trading will come later when volume picks up," said Hamed Soltan-Nejad, IME's chief executive, last week.
They will be traded through existing platforms and dowill not require new permits or trading codes.
The events did little to change mood and market trends. TSE's benchmark remained almost unchanged at 80,709 points on Sunday.