Karachi: In a significant move aimed at enhancing market operations, the Pakistan Stock Exchange Limited (PSX) has proposed amendments to its regulations to oversee the Single Stock Options Contracts (SSOC) Market. The proposal, announced on October 22, 2026, follows the PSX’s authority under Section 7 of the Securities Act, 2015, and aims to establish a robust framework governing the operational, trading, clearing, and risk management aspects of single stock options.
The amendments detail several specifications, including the eligibility of stocks for the SSOC Market, which will be selected from the pool of Deliverable Futures Contract (DFC) eligible stocks as determined by the Exchange. The proposed option classes include both Call and Put Options, with a European exercise style, meaning they can only be exercised on the expiration date. Settlement of these contracts will be achieved through the delivery of the underlying security and operate on a T+1 settlement cycle.
The regulations also specify a contract symbol system, distinguishing between standardized and non-standardized contracts with a defined symbol format. The contract size is set at 500 shares, subject to adjustments by the PSX. Contract months are outlined as the spot month and the following two calendar months, with contracts opening on the first trading day after the last Friday of the expiring month.
According to information available from the Pakistan Stock Exchange (PSX), the moneyness of the options will be maintained with a minimum of three In-The-Money (ITM), one At-The-Money (ATM), and three Out-of-The-Money (OTM) contracts at all times. A maximum of five ITM and five OTM contracts will be available, with monthly reviews to disable deep ITM or OTM strikes without open interest. The theoretical contract listing price will be calculated using the Black-Scholes Model, with a minimum fluctuation or tick size set at PKR 0.01 per underlying security.
The expiration or last trading day for these contracts is set for the last Friday of the expiry month, adjusted if it falls on a non-trading day. Contracts will be adjusted for corporate actions using the standard ratio method, while daily options settlement prices and exercise price intervals will be determined and updated by the PSX as necessary.
Trading fees and commissions have also been outlined, with brokers charging the same commission as in the Ready and DFC markets and a trading fee of PKR 7.00 per PKR 100,000 of value traded. Additionally, a regulatory fee of PKR 0.88809 and an SECP levy of PKR 0.65 per PKR 100,000 of value traded will be collected, consistent with existing markets.
The proposed amendments are part of PSX’s ongoing efforts to refine market operations and provide a structured environment for single stock options trading, which is expected to enhance market liquidity and offer new opportunities for investors.