Islamabad, Dec 13: The Pakistan Stock Exchange (PSX) is set to introduce cash-settled futures and options, with testing scheduled for March 2025, according to Bloomberg. PSX CEO Farrukh H Sabzwari explained that this move aims to enhance derivatives trading by reducing the capital requirements for traders and improving market liquidity.
Currently, PSX offers deliverable futures, where positions are settled through the delivery or acceptance of shares. The introduction of cash-settled futures is expected to address liquidity challenges near contract expiry.
Pakistan’s stock market has experienced a remarkable 170% surge over the past 18 months, largely due to economic stabilization and support from the IMF. With expected interest rate cuts, Sabzwari hopes to increase retail participation, which currently accounts for less than 1% of the population, and stimulate IPO activity.
The CEO sees this economic stability and the introduction of new products as an opportunity to boost retail involvement in the market. This follows a historic rally, with the KSE-100 Index surging 170% over the last 18 months. On Thursday, the main bourse surpassed the 114,000-point mark after its third-highest gain since December 5, 2024.
