It was announced today that the board of directors of the Tel Aviv Stock Exchange (TASE) decided in its meeting on Thursday (August 4, 2016) to launch US Dollar weekly options. Weekly TA-25 Index options were introduced by TASE in 2013 and their trading volumes are constantly on the rise. The average daily volume of such options was approx. 12,000 in 2013 and currently exceeds 50,000.
Further to the success of the TA-25 Index weekly options, it has been decided to launch US Dollar weekly options. The new options are suitable for a broad range of investors, including those who seek hedging against short-term FX risks with a relatively low margins requirement. The weekly options series will enable an additional expiration date, thereby creating a clearer picture of the traders’ expectations of the volatility surface.
The weekly options share similar specifications with the monthly options:
– Exercise style –European.
– Cash Settlement.
– Contract multiplier – U.S. $10,000.
– Settlement price – the last NIS/ US dollar rate published by the Bank of Israel prior to the expiration date.
– A new series of weekly options will begin trading every Tuesday, expiring on Wednesday the following week. The case in which two weekly series will be traded on Tuesdays will allow to roll over positions from week to week.
Concurrently with the weekly options, US Dollar weekly futures will also be launched.
In order to encourage liquidity in the new derivatives immediately upon their introduction, there will be a daily quota of 20,000 orders per each quote generator operating in such derivatives. The daily quota will not be subject to an orders-to-volumes ratio. Trade in the new derivatives will be launched after completion of the technical preparation and will be announced in advance.
Robby Goldenberg, Senior VP and Head of the Trading, Derivatives and Indices Department, said:
“The trade in US Dollar weekly derivatives is a further step in the expansion of the range of derivatives traded on the Tel Aviv Stock Exchange. The new derivatives will expand the investment and hedging possibilities of all market participants and they integrate well with the trend of the rising trade volumes of US dollar options, whose daily volume exceeded 50 thousand in 2016.”