Shasta Issuing Put Options to Assure Profitability of Shares
EghtesadOnline: The Social Security Investment Company plans to issue put options for stocks of the Tehran Stock Exchange to help reassure investors that shares are worth buying.
Known by its Persian acronym Shasta, SSIC the largest holding multidisciplinary company and has a market capitalization of 1,380 trillion rials ($6 billion). It is among the top four large- cap companies listed with the TSE.
According to notice posted on the TSE website, issuing options contracts will start today (Saturday). Put options will mature in June 2022 and the strike price will be 11,688 rials -- 1,986 rials higher than the current price of the Shasta ticker at TSE’s bulletin board.
A put option is a financial market derivative instrument that gives the holder the right to sell an asset at a specified price (the strike) by a specified date. Put options are most commonly used to protect against a fall in the price of a stock below a specified price.
If the price of the stock declines below the strike price, the holder of the put has the right, but not the obligation, to sell the asset at the strike price, while the seller of the put has the obligation to purchase the asset at the strike price if the owner uses the right to do so.
Shasta is the investment arm of the Social Security Organization (SSO), Iran’s largest pension fund and biggest insurance company providing insurance services to wage-earners and voluntary coverage to the self-employed.
The multidisciplinary company controls nine holdings operating in a wide range of sectors, including petroleum, petrochemicals, pharmaceuticals, cement, transportation, telecom, shipping and finance. These in turn manage 187subsidiaries.
In what is seen as one of the biggest listings in Iran’s bourse history, Shasta went public in April and offered 10% of its shares.