Structured Finance and Derivatives

Structured Finance and Derivatives

Markaz Research
Markaz: Most GCC markets gain as lockdown restrictions ease and oil prices rise; Concerns over funding of deficit holds back Kuwait
Published: 03 - Aug - 2020 Read More
Markaz Research
Markaz: Issuances by GCC Sovereign entities increased by 40% year-on-year amid growing budget deficits after the double blow of Covid-19 and slump in oil prices.
Published: 26 - Jul - 2020 Read More
Markaz Research
Markaz Graduate Development Program Continues Despite COVID-19 Lockdown
Published: 23 - Jul - 2020 Read More
View All News

Structured Finance and Derivatives

Market Making Activities

Our Structured Finance team continues to be the only issuer of options on stocks in Kuwait and we will continue our drive to expanding our derivatives capability regionally. We consider Structured Finance a key strategic capability, which enables us to provide our clients creative financing solutions, and our investors structured investments with capital protection.
Markaz organized several educational programs to help investors and traders get familiar with the benefits and risks of trading equity options. Markaz is firmly committed to build on its experience in the derivatives field towards the development of Boursa Kuwait ETO trading framework whereby investors can buy and sell American call and put options during the spot market hours.

Mechanism for Trading Options

In 2001, Markaz proposed to Boursa Kuwait (Formerly known as Kuwait Stock Exchange) to establish a framework for trading equity options in Kuwait. Markaz retained options experts to conduct extensive studies using historical data to measure the risks resulting from options trading. After analyzing international best practices, the characteristics of the Boursa Kuwait, the nature of risks and the needs of investors, Markaz suggested a mechanism for option trading in Boursa Kuwait.

Structuring Forsa Fund

In November 2003, Markaz was granted the approval to write option contracts; and immediately thereafter launched Forsa Fund which is the Middle East’s First Derivative Fund created to provide Markaz clients unique investment opportunities and contribute towards the development of the Kuwaiti capital market.

Introducing Call Options

Markaz developed the option trading system running at Boursa Kuwait. Testing and measurement of this system were made continuously until March 2005 whereby Forsa Fund started writing standardized and tradable Call options on a group of listed stocks for the first time in Boursa Kuwait. Forsa Fund provides liquidity to all the option contracts by offering daily Ask/Bid prices.

Structured Finance and Derivatives

Forsa Financial Fund Summary