For twenty years, an employee of a publicly traded company who wanted to sell shares through an Israeli trustee had exactly two options: a market order or a limit order. That changes this week, as Phoenix ESOP begins rolling out stop-loss and OCO (One-Cancels-the-Other) orders, company by company - the first new order types to reach Israel's trusteeship market in roughly two decades.
A Gap Exposed by the 2021 Listings Wave
The need for better tools became obvious after the 2021 Nasdaq listings boom, when many Israeli tech companies went public only to see their valuations collapse, in some cases by 80% or 90%. Employees who had watched equity positions worth hundreds of thousands of dollars grow suddenly found those same holdings worthless, with options sliding out of the money before many had a chance to react. Eyal Froind, CEO of Phoenix ESOP, argues the core issue was never a lack of confidence in the companies themselves. "The big problem of the average tech employee isn't that he doesn't believe in his company. It's that he has no risk management mechanism," he says. Employees, he notes, were effectively managing significant assets "with their eyes closed," relying on simple market orders with no way to set a floor.
How Stop-Loss and OCO Orders Work
A stop-loss order lets an employee set a sell price below the current market value, valid for a defined period. If the share price falls to that level, a market sell order triggers automatically for the chosen quantity - no need to monitor the screen or react in real time. Froind illustrates the logic with a simple scenario: if a stock peaks at $100 and an employee sets a stop at $80, a later crash still means a loss relative to the peak, but a contained one, rather than a holding that falls to near zero.
OCO orders extend that logic in both directions. With a share trading at $100, an employee could simultaneously place a limit order at $120 and a stop order at $80 on the same quantity. Whichever threshold is reached first executes the sale, and the other order cancels automatically. Together, the two mechanisms give employees a defined risk band instead of an open-ended bet on where the stock goes next.
Not Investment Advice, But a Safety Mechanism
Phoenix ESOP is explicit that these are risk management instruments, not guidance on when to sell. Holding through volatility has long been the default approach for many employees, and it has frequently worked out. "Some employees will say that even if the stock drops 90%, they believe it will rise 200% afterwards, and that's their decision," Froind says. "But now they have a serious tool to manage the risk, one that until today simply did not exist." The orders arrive alongside a simulator that shows employees their actual after-tax proceeds, part of an eighteen-month overhaul of Phoenix ESOP's core systems, trading infrastructure, and digital interfaces.
A Tax Dimension With National Implications
Under Section 102 of Israel's tax code, the taxable event occurs at the point of sale. A holding that collapses before being sold generates little or no tax revenue, even if it once represented substantial paper gains. Froind frames the new tools as a case where employee interests and state interests align. "The employee lost a great deal of money, but the state also lost a great deal of tax revenue," he says. "That would not have happened if a stop-loss had existed." With equity taxation now part of broader public debate in Israel, giving employees the means to lock in gains, rather than lose them entirely to market swings, carries implications beyond individual portfolios.