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Tomorrow (March 29, 2018), the Tel-Aviv Stock Exchange (TASE) is launching series of long-dated TA-35 index futures.
The long-dated futures on the TA-35 Index will be for 15 months. New series of future contracts will be opened in March, June, September and December for 15 months. In the other months, as is the current practice, series for 3 months will be opened. Consequently, at any point in time, there will be 7 monthly series being traded – 3 series for each of the three coming months and another 4 series for 6, 9, 12 and 15 months. This will be in addition to the weekly futures that will continue to be opened, as is the current practice. The opening of futures series for 15 months will facilitate, at any point in time, trading in futures having a term to expiry of at least a year and will allow positions to be rolled-over, also for periods of a year.
The launch of long-dated derivatives is taking place following talks held with TASE members and market players and is based on a professional analysis conducted by TASE. TASE believes that this measure will contribute to enhancing liquidity and will provide a solution to a real existing need for the various market players. TASE has identified several parties that might trade in long-dated derivatives, including the shift to TASE of activity that currently takes place on the OTC market and the likelihood of “regulatory hedging” in respect to the insurance companies’ nostro portfolios, as part of the implementation of the Solvency II Regulations. In addition, the launch of the new derivatives might encourage the entry of new players who prefer to trade in “longer” derivatives than those currently in existence.
The series of TA-35 Index options will be launched on September 6, 2018.
