Future contracts were unveiled on Wednesday during the 15th Exhibition of Financial Industries in Tehran to underpin stability and predictability in the stock market.
Majid Eshqi, the head of the Securities and Exchange Organization (SEO) and Mahmoud Goudarzi, the CEO of Tehran Stock Exchange were in attendance.
Eshqi highlighted the role of future contracts, stating, "One of the essential instruments required for the market's two-way functionality is future contracts. It has undergone scrutiny, trials and necessary tests. So far it is active on three symbols and will be launched in other symbols by the end of the calendar year next March," SENA quoted him as saying.
"Future contracts are considered high-risk instruments and alongside other instruments cater to the needs of professional traders and funds. As such, it is essential that the TSE and investment consultants make it absolutely clear that this instrument is not suitable for the general public," Eshqi said.
Sufficient knowledge is necessary for using this instrument effectively, he added.
The SEO boss said in addition to trading options, future contracts can facilitate the development of trading strategies and enhance market predictability.
"We have made progress in the field of investment funds and introduced a wide variety of options in this area," he said. "However, there is a gap in risk coverage investment funds, which will also be launched by the end of the year. Coordination for creating the infrastructure and setting up the funds are in the works."
Diversifying Portfolios
During the unveiling ceremony, Mehdi Sabzi, the TSE deputy for market operations, outlined the main goals of future contracts. "The introduction of future stock contracts serves as a means to diversify the portfolio of shareholders and market players."
Future stock contracts offer an opportunity for investors and traders to diversify their portfolios and engage in strategic trading approaches. Such contracts aim to enhance market efficiency and provide a valuable venue for market participants seeking risk management and advanced trading strategies.
Launch of future stock contracts is seen as a major step forward in the Iranian capital market. The contracts provide traders and funds the way to manage risk effectively and improve market predictability. It is important to note that the contracts require a sufficient level of knowledge and expertise to ensure optimal utilization.
New Market Analysis Center
The SEO head also unveiled the Market Sentiment Analysis Center, affiliated to the Tehran Stock Exchange. The intention is to collect and analyze information on the performance of the bourse along with socioeconomic indicators.
The center is expected to play a vital role in providing valuable insight into market trends, investor sentiment, and economic indicators. By gathering and analyzing data, the center will assist market participants in making informed decisions and get a better understanding of the dynamics of the capital market.
Eshqi emphasized the importance of information analysis in today's financial landscape. "The Market Sentiment Analysis Center will serve as a valuable avenue for market participants, providing them with timely and accurate information on capital market trends, economic developments and social factors that impact investment decisions."
Eshqi also attended the opening ceremony of Sukuk Plus. The introduction of Sukuk Plus seeks to streamline and simplify the process of capital market financing, making it more accessible to economic enterprises. By leveraging the platform, companies can navigate financing trends with greater ease and efficiency.
"Economic enterprises face challenges and ambiguities in issuing securities and processes related to capital market funding and as a last resort approach the banking network," he said.
To address these challenges, the Central Asset Management authority has launched a platform to facilitate the use of securities and capital market financing. Prospective investors seeking capital market financing can log on to sukukplus.ir
