For twenty years, an employee of an Israeli public company who wanted to sell shares held through a trustee had exactly two options: a market order or a limit order. This week, Phoenix ESOP began rolling out two more - stop-loss and OCO orders - marking what its chief executive describes as the first new order types to reach Israel's trusteeship market in roughly two decades.
A Gap Exposed by the 2021 Crash
The change arrives against the backdrop of a painful lesson from Israel's 2021 listings wave. Several Israeli companies that went public on Nasdaq that year later lost the bulk of their market value, in some cases 80% or 90%. Employees who had watched their equity grow to hundreds of thousands of dollars found themselves holding options that were no longer in the money, with no mechanism in place to protect the gains while they still existed.
Eyal Froind, CEO of Phoenix ESOP, frames the issue less as a failure of employee judgment than as a structural gap. "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. For two decades, that meant managing substantial personal wealth with tools that offered no way to set a floor or a ceiling in advance.
How Stop-Loss and OCO Orders Work
A stop-loss order lets an employee set a sale price below the current market value, valid for a defined period. If the share price falls to that level, a market sell order is triggered automatically for the chosen quantity, without requiring the employee to monitor the market continuously. "If a stock peaked at $100 and the employee had placed a stop at $80, yes, he loses something," Froind says. "But he keeps most of the pot."
OCO orders - One-Cancels-the-Other - combine two instructions on the same holding: a limit order above the current price and a stop-loss below it. Whichever threshold is reached first executes the sale, and the other order is automatically cancelled. It is a standard instrument among professional traders, now available for the first time to Israeli employees holding shares under Section 102 trusteeship arrangements.
Risk Management, Not Investment Advice
Froind is explicit that Phoenix ESOP, which serves thousands of companies and acts as trustee for most global technology firms operating in Israel, does not advise employees on when to sell. The new orders are a risk management instrument, not a recommendation. Holding and waiting, he notes, has often been the right call historically - and some employees may rationally choose to keep doing so even after a steep decline, betting on a future recovery.
What changes is that the decision becomes a choice rather than a default. The tools build on an eighteen-month overhaul in which Phoenix ESOP replaced its core trading systems, launched new application and web interfaces, and introduced a simulator showing employees their actual after-tax proceeds.
A Tax Policy Dimension
Under Section 102 of Israel's tax code, the taxable event occurs at the moment of sale. A holding that collapses before being sold generates little or no tax revenue, regardless of its earlier paper value. Froind argues this creates an unusual alignment of interests: "The employee lost a great deal of money, but the state also lost a great deal of tax revenue. That would not have happened if a stop-loss had existed." With equity taxation under broader public debate in Israel, the introduction of standard risk-management orders adds a practical dimension to a policy conversation that has largely focused on rates and thresholds rather than on the mechanics of when and how employees actually sell.
