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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.

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DOW  121.18 | NAS  33.73 | S&P  17.00
(Data as of 2013-05-17 4:39 EDT)

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