_20260529073616622_a5048c_20260907134137512_e9e626.webp?ssl=1)
The Pakistan Stock Exchange (PSX) has proposed a regulatory framework to launch a Single Stock Options Contracts (SSOC) market, inviting written feedback from market participants and stakeholders by November 5, 2026.
Under the proposal, options will be available on stocks drawn from the pool of Deliverable Futures Contract (DFC) eligible securities, covering both call and put variants. The contracts will be European-style, exercisable only on the expiration date, and settled via physical delivery of the underlying shares on a T+1 cycle—accelerated from the current T+2 standard for derivatives.
Each contract represents a lot size of 500 shares, adjustable for non-standardized contracts. Series will be offered for the spot month and the subsequent two calendar months, opening on the first trading day after the last Friday of the expiring month and expiring on the last Friday of the expiry month (or the prior trading day if that Friday is a holiday).
At any given time, a minimum of three in-the-money, one at-the-money, and three out-of-the-money strikes must be listed, capped at five in-the-money and five out-of-the-money strikes alongside the single at-the-money contract. Initial listing prices will be derived from the Black-Scholes model with a tick size of Rs0.01 per underlying share, while corporate actions will be addressed via the standard ratio adjustment method.
Brokerage commissions will mirror those in the Ready and DFC markets, set at a minimum of 3 paisa or 0.15%, whichever is higher. PSX will levy a trading fee of Rs7.00 per Rs100,000 of traded value, a regulatory fee of Rs0.88809, and an SECP levy of Rs0.65 per Rs100,000, with the existing CCPF levy for derivatives also applicable.
Key regulatory shifts include discretion for PSX to offer 90-day or alternative maturities—though monthly expiries will launch in the first phase—reclassification of at-the-money options as distinct from out-of-the-money, and automatic exercise of remaining in-the-money contracts at expiry unless the buyer acts under NCCPL assignment procedures. Option premiums are payable upfront by the buyer on a T+0 basis, eliminating margin requirements for long positions. The Board, with SECP approval, may suspend or permanently discontinue the market.
The Daily Option Settlement Price will be determined via a volume-weighted average price (VWAP) of trades in the final minutes of the session, extending to the last few hours or the full day if volume thresholds are unmet. Should the VWAP fall below intrinsic value, the Black-Scholes theoretical price—using a risk-free rate of KIBOR plus a spread and the underlying’s historical volatility—will prevail.
Comments may be submitted via email to comments.rad@psx.com.pk or by post to the Chief Regulatory Officer, Regulatory Affairs Division, Pakistan Stock Exchange Building, Karachi. PSX intends to publish a Response Paper summarizing submissions and its replies following the consultation period and SECP approval of the amendments.
