Options and futures on the Shekel-Dollar exchange-rate were launched in 1994 and 1996, respectively, and in November 2001, they were joined by options and futures on the Shekel-Euro exchange rate. These are used to hedge against currency fluctuation.
Since November 2016 weekly options and futures on Shekel-Dollar exchange rate are traded on TASE. With the exception of life span, the terms of weekly derivatives are similar to those of monthly derivatives.
The Main Advantages of FX Derivatives
- Trading in stock exchange products provides maximum transparency and equal opportunity to all market participants. Closing positions is done directly in the market, without relying on intermediaries such as banks and brokers.
- The transactions are carried out in the market at low cost (close quotation intervals).
- The Derivatives Clearing House is a central counter party to all the transactions and thus guarantees customers a low credit risk relative to OTC transactions.
- The characteristics of the stock exchange products enable hedging for small customers alongside large customers:
- Contract size: $10,000.
- Convenient expiration dates: from one week to one year.