The Implementation of Market-Making in Bank Leumi Equity Options: A New Era for TASE

On November 2, 2025, the Tel Aviv Stock Exchange (TASE) announced the initiation of market-making for Bank Leumi equity options, marking a significant milestone in the evolution of the Israeli derivatives market. This program, developed in collaboration with Bank Leumi, aims to enhance liquidity and attract foreign investments, thereby boosting the overall attractiveness of TASE. With a market capitalization that stands as the largest on TASE, Bank Leumi is pioneering this tailor-made market-making program designed specifically for its equity options.

Driving Forces Behind Market-Making

The core objective of the market-making initiative is to promote the trading of financial instruments associated with Israel's foremost companies while simultaneously diversifying the investment landscape within the nation. By designating two prominent financial institutions, Idan Financial Instruments and Barak Capital Group, as the official market makers for Bank Leumi options, TASE is taking a proactive approach to invigorate the trading environment.

This program is projected to operate for a year, allowing sufficient time for the market makers to establish themselves and for the benefits of improved liquidity to materialize. The anticipation of a shift to a Monday-to-Friday trading week in January 2026 further amplifies the strategic significance of this initiative, as it sets the stage for enhanced trading opportunities.

A National Trend in Equity Options

Globally, equity options trading has seen an exponential rise, characterized by increased volumes and a surge in retail participation. The rising demographic of younger investors showcases a shift in perception towards options trading; they are now viewed not just as speculative instruments but as valuable tools for risk management and market positioning. In 2024, the United States alone witnessed trading volumes reach an impressive 16.4 billion contracts, reflecting a 19.4% increase year-on-year.

Israel is not lagging in this evolution—during the first half of 2025, nearly 87,000 new trading accounts were registered, and TASE has been averaging the addition of 16,000 new accounts each month. This growth signals an undeniable enthusiasm for equity options among investors, making this market-making initiative a timely and relevant development.

Opportunities for Institutional and Retail Investors

The advantages of equity options extend beyond individual private investors; institutional investors leverage bank stock options as an effective means to gain economic exposure to these shares without necessitating physical ownership. This offers both compliance with regulatory constraints and optimal risk management strategies within their investment portfolios.

The mutual fund sector, with over NIS 36 billion invested in bank stocks, represents a crucial part of the market landscape, as options trading provides a mechanism for efficient hedging. Notably, one-fifth of the funds in the TA-125 index is allocated to shares of Israeli banks, underscoring the relevance of equity options in diversifying and managing large-scale investments.

Aligning with Global Standards

TASE’s market-making strategy exemplifies its commitment to enhancing its product offerings while solidifying its position in the global capital market. This initiative is reminiscent of the successful share market-making frameworks already in place, which emphasize competitiveness and reward performance among market makers. By applying these principles to options trading, TASE expects similarly positive outcomes that will benefit all participants in the market.

As TASE embarks on this innovative program with Bank Leumi, the implications of such advancements seem promising. Not only does it enhance the appeal of investing in Israeli equities but it also signifies a progressive step towards bolstering the market's overall structure and its ability to attract foreign investments. The future looks bright for TASE as it aligns itself with both national and global trading trends, adapting effectively to the evolving financial landscape.

For more detailed information on this initiative, you can contact Orna Goren, Head of Communication and Public Relations at TASE.