Download or read book Single Stock Futures and Their Impact on Risk Characteristics of the Underlying Stocks written by Imran Riaz Malik and published by . This book was released on 2018 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: The concern regarding destabilizing ability of trading in futures markets in terms of increase in risk is still unresolved in developed and developing economies. This discussion also prevailed in Pakistan after the Global Financial Crisis (GFC). To investigates this concern with respect to Single Stock Futures (SSFs) and their impact on the underlying stocks, this study made use of data from 1999 to 2008. Speci cally, this study investigates the introduction of SSFs in relevance to their impact on the systematic and unsystematic risk of their counterparts. The statistical results of the study show that introduction of SSFs does not enhance the overall risk of the underlying stocks. Therefore, it can be concluded that SSFs cannot be blamed for any apparent volatility in the Pakistan Stock Exchange (PSX) at and before GFC. There could be some other reasons for change in risk level (accounting and macroeconomic fundamentals or industry speci fic etc.). The results of this study are in line with a category of earlier studies, which show that introduction of futures do not destabilize the underlying market. The study implies that flexible regulated futures markets can improve price discovery and liquidity of the market, while acting as an agent for hedgers.