It is also investigating the feasibility of introducing other products, including interest-rate derivatives, TFEX managing director Kesara Manchusree said last week.

The new product will appeal to both local and foreign investors as it can be used for speculative or risk-management purposes, she said. "In overseas futures markets, index options have attained great popularity because investors' losses can be limited. To build confidence, the market will encourage the use of market-makers for the SET50 index options," she said.

TFEX was formally inaugurated on April 28, and its first product was SET50 index futures. The market has averaged trading volume of around 1,000 contracts per day.

Obligation is what differentiates futures and options.

An option is a contract whereby one party has the right but not the obligation to exercise the contract on or before the exercise date. Options come in two types: call options are rights to buy underlying assets while put options are rights to sell underlying assets.

A futures contract gives the holder the right and the obligation to buy or sell underlying assets at a certain date in the future.