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As part of its drive to expand on the variety of derivatives being traded on, TASE is launching options on individual shares. The first of such options is an option on ICL shares, which started on March 29, 2009.
A month later, on April 23rd, options on Bank Hapoalim and Bank Leumi shares will be listed and, during May, options on Teva shares will be listed. The companies whose options will be listed are among the 10 most widely traded and the 10 biggest, in terms of market value, on the TA-25 Index.
The significant features of the new options on shares are similar to the options traded on the TA-25 Index: European type options, cash settled and which expire on the same day on which options on the TA-25 Index expire.
TASE appointed two market makers for the options being traded: Clal Finance Derivatives and Tradomatix. This will provide liquidity and depth to the order book which will enable investors to buy and sell options, quickly, on options' first trading day. The market makers which the TASE has appointed have agreed, during the course of trade and for a period of not less than one year, to submit, buy and sell orders, in number, series and intervals as shall have been determined by the TASE's board of directors.
Ester Levanon, TASE CEO, said that "The development of the derivatives market in Israel is very important for TASE. Trade in options on shares will contribute to the development of the market and provides traders with further possibilities to hedge their investments."
Options on shares have been traded in the United States, on the Chicago Board Options Exchange (CBOE), since 1973. Among the companies in respect of whose shares options are traded are such giants as Apple and Google, and Israeli companies such as Teva and Nice. Options on shares are traded on the world's most advanced stock exchanges, such as those in the USA, Germany, Italy, Hong Kong, France and the United Kingdom.
Further details concerning the options and their features may be found on TASE's website at: http://www.tase.co.il/TASE/Products/DerivativesMarket/DerivativesFAQ
