Tel Aviv Stock Exchange Launches Weekly Options On The TA-25 Index

26/11/2012

At its meeting on Thursday, November 15, 2012, the Tel Aviv Stock Exchange (TASE) Board of Directors approved in principle a proposal to launch weekly options and futures on the TA-25 index.

The terms of weekly options will be identical to those of monthly options, with the exception that their lifetime is only one week. The weekly options launched by TASE will be cash-settled European options with a contract multiplier of 100. The reference exercise price will be the Opening TA-25 index price set each Thursday.

Over the past few years leading derivatives exchanges have launched weekly options in response to avid investor interest in these instruments. Weekly options tend to be more liquid than one-month options with similar term structures. It is anticipated that the launch of weekly options will stimulate trading volume of both the derivatives and the underlying TA-25 shares, as was the case when TASE migrated from two-month to one-month expiration options. Among other things, these instruments are attractive to retail investors, who favor less expensive derivatives carrying lower margin requirements. Trading in weekly options is tentatively scheduled to commence towards the end of the second quarter of 2013.

Ester Levanon, TASE CEO stated that "TASE works constantly to introduce new derivative products.The launch of weekly options will expand the range of derivative products available to local and foreign investors alike".