A derivative is a financial instrument (such as a future or option) whose value is derived from and is dependent on the value of an underlying asset. For example, the value of TA-35 index derivatives is based, inter alia, on the value of the index during trading on TASE.
There are two main types of derivatives: options and futures, which allow for the trading parties to hedge against fluctuations in the underlying index. Derivatives are also considered as an alternative investment for the underlying asset.
The TASE derivatives market is highly active, and since 1999 it is fully-automated on TACT (Tel Aviv Continuous Trading).
The MAOF (Derivatives) Clearing House is a subsidiary of the TASE and its board of directors consists of external directors and directors who represent exchange members. It sets the rules and regulations governing the derivatives market.
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