The Shanghai Stock Exchange is on track to launch options for individual securities, which would give investors a new financial instrument to manage risks and profit from market volatility, people familiar with the situation told Dow Jones Newswires Wednesday.

"Simulation for trading options will likely be launched soon," a person familiar with the matter said.

"We received notices from the Shanghai bourse yesterday, and the bourse required us to conduct surveys on options investments among our clients," a person from a brokerage said.

The bourse has selected the underlying securities for the first two options--shares of Industrial & Commercial Bank of China (601398.SH) and the SSE 50 ETF (510050.SH). The exchange traded fund is linked to the SSE 50, which gauges the performance of 50 blue-chip stocks trading on the bourse, said one of the people.

An investor who buys options has the right to buy or sell the underlying security at a specified price at a future date.

Write to Amy Li at amy.li@dowjones.com

Copyright © 2012 Dow Jones Newswires

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(Data as of 2013-05-21 4:36 EDT)

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