Bursa Malaysia should look into Options

The KLSE needs more financial innovation within a "structured" manner. Options are an excellent way to produce arbitrage opportunities that could make the market more efficient. Fisher Black, nobel prize winner and one of the creators of the Black-Scholes theory for option pricing reasoned that options were another instrument that could aid in price discovery and arbitrage.

For the Malaysian securities market, we need more ways to derive daily prices. Options will create volume in stocks and securities. At the same time, with these extra revenues, Bursa Malaysia and the Government stand to cut some of the taxing stock transaction fees. This will also create a more liquid finance system.

So to summarize:

1. Better price discovery for stocks.
2. Extra revenue will bring in room to cut current commission rates.
3. Higher security volume resulting from lower commissions and hedging activities.
4. More liquidity and efficiency.
5. More foreign investor interest as a result