For twenty years, tech employees in Israel who wanted to sell shares held through a company trustee had just two options: sell at whatever the market offered, or set a fixed price and wait. This week, Phoenix ESOP began rolling out two additional order types, stop-loss and OCO, the first such change to reach the Israeli trusteeship market in roughly two decades, according to company CEO Eyal Froind.
Closing a Long-Standing Gap
Phoenix ESOP is among Israel's oldest trustees operating under Section 102, the tax framework that governs how employee stock options and restricted shares are held and eventually sold. It serves thousands of companies, including most global technology firms with an Israeli presence, and has been involved in a large share of the country's major acquisitions. Until now, its trading options mirrored what was available two decades ago: a market order, executed immediately at the prevailing price, or a limit order, executed only once a chosen price is reached.
That simplicity became a liability for many employees who went through the Nasdaq listings wave of 2021. Shares in a number of Israeli companies that debuted that year later lost the majority of their value, in some cases 80 to 90 percent. Employees who had watched paper holdings worth hundreds of thousands of dollars often ended up with options that were no longer worth exercising, because they had no mechanism to lock in gains as prices fell.
What Stop-Loss and OCO Actually Do
A stop-loss order lets an employee set a sell price below the current market value in advance, along with a validity window. 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 screen or react in real time.
An OCO order, short for One-Cancels-the-Other, combines two instructions on the same holding: a limit order above the current price and a stop-loss below it. Whichever threshold is hit first executes the sale, and the other instruction is automatically cancelled. This allows an employee to define both an upside target and a downside floor in a single step.
- Stop-loss: a defined downside price, executed automatically if reached
- OCO: paired upside and downside orders on the same quantity, with one cancelling the other
- Both are offered alongside Phoenix ESOP's existing simulator, which shows an employee the expected after-tax proceeds of a sale
A Tool for Risk, Not a Recommendation
Froind is explicit that the new orders are not investment advice and that Phoenix ESOP does not instruct employees on when to sell. Holding onto shares through downturns has historically paid off for many employees, and the trustee is not discouraging that approach. The orders are meant to give employees a way to define their own exposure in advance, rather than discovering after the fact that a holding has collapsed in value.
There is also a public finance dimension to the change. Under Section 102, the taxable event occurs at the point of sale. A holding that loses most of its value before being sold generates little or no tax revenue, whereas a sale executed at a protected price preserves both the employee's proceeds and the state's tax base. Framed this way, better risk management tools for employees also serve a broader fiscal interest.
Part of a Wider System Overhaul
The new order types follow an eighteen-month period in which Phoenix ESOP rebuilt its core trading infrastructure, introduced a new mobile application and web interface, and added the after-tax simulator. According to Froind, the push for stop-loss and OCO orders came directly from employees at client companies rather than from internal planning, reflecting demand built up over the volatile years following the 2021 listings.
The rollout is proceeding company by company rather than across the entire platform at once, giving Phoenix ESOP room to adjust the tools as they reach a broader base of employees managing equity compensation in a market that has shown, repeatedly, how quickly paper wealth can disappear.