Nasdaq Dubai, formerly Dubai International Financial Exchange (DIFX), yesterday listed equity derivatives for the first time.
The instruments, created by the exchange itself, consist of futures contracts on an index of UAE shares created by FTSE International, and futures contracts on 21 individual shares listed on UAE exchanges.
Jeff Singer, Chief Executive of Nasdaq Dubai, said: "Equity derivatives play a beneficial role in international markets around the world and we are delighted to bring them to the UAE.
Nasdaq Dubai derivatives that are available to be traded are Index Futures (cash settled) on the FTSE DIFX UAE 20 Index. The index is based on the shares of 20 companies listed on Nasdaq Dubai, the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX).
The FTSE DIFX UAE 20 Index is to be renamed the FTSE Nasdaq Dubai UAE 20 index. "They enable investors to hedge risk, and can increase trading volumes in the underlying stock as well as reduce volatility in its price."
Susquehanna International Securities (SIS), a member of the Susquehanna International Group of Companies (SIG), is expected to be a market maker in the derivative products. Arqaam Capital is a derivatives trading member of the exchange.
"Nasdaq Dubai's equity derivatives platform has great potential to develop into a substantial market. It will cater initially for institutional investors and in due course also for individual investors. We intend to introduce further equity futures contracts as well as options," Singer said in a statement.
John Keogh, Director and Co-Chair of SIS's Management Committee, said: "The launch of these products cements Nasdaq Dubai's reputation as one of the most progressive exchanges in the region. We are honoured to have been chosen by Nasdaq Dubai to be the leading market maker in these products. – Emirates Business
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