THE IMPACT OF STOCK OPTIONS TRADING ON THE MARKET VALUE OF COMPANIES LISTED IN KUWAIT STOCK EXCHANGE

Ghada Ali Timraz () and Faris Nasif Al-Shubiri ()
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Ghada Ali Timraz: Amman Arab University, Amman, Jordan
Faris Nasif Al-Shubiri: Amman Arab University, Amman, Jordan
Authors registered in the RePEc Author Service: faris nasif ALShubiri

Business Excellence and Management, 2012, vol. 2, issue 3, 63-76

Abstract: This study aims to examine the impact of stock options trading on the market value of companies listed in Kuwait Stock Exchange. The phenomenon of volatility in securities prices concerned as a threat to the companies listed on Kuwait Stock Exchange, which forced companies' managers to deal with new financial instruments particularly financial options to hedge from those risks .we will take a sample of (30) companies that deal with stock options, these companies are listed in the appendices, we have chosen these companies because of the availability of adequate information about trading on stock options from 2006 to 2011. All companies must adopt options contracts because of its significant impact on the market value of those companies through the impact on the trading volume of companies' stocks and thus changes in the demand and supply of such shares which leads ultimately to changes in the value of shares of these companies in the market. The researcher recommends using options contracts from the perspective of the investor because of its role in achieving high and guaranteed profits, when exercising the option contract whether is call or put option at a predetermined price and thereby yielding a capital gains resulting from the difference between buying and the selling price.

Keywords: Kuwait Stock Exchange; Investment decisions; International financial markets (search for similar items in EconPapers)
JEL-codes: G10 G11 G15 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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