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PHLX Directed Order Flow


The PHLX XL directed order flow program offers order flow providers the ability to direct order flow in options classes to specific PHLX Specialist(s), Streaming Quote Trader(s) (SQTs) or Remote Streaming Quote Traders (RSQTs) who are assigned in those option classes and have agreed to participate in the program. This program enables the order flow provider to better manage their order flow, manage customer expectations, deal directly with liquidity providers, and manage their overall options business on a more direct level.

Frequently Asked Questions

What is a Directed Order?

A Directed Order is any order to buy or sell which an Order Flow Provider has directed to a particular specialist, SQT, or RSQT. To qualify as a Directed Order, the order must be delivered to the Exchange via the PHLX XL electronic order entry and execution system.

Who can send a Directed Order?

Any Order Flow Provider who can send orders electronically through PHLX XL and direct those orders to a specific specialist, SQT or RSQT of their choice (if that specialist, SQT or RSQT is assigned in that option class).

How do participants send a Directed Order?

Firms must enter the appropriate firm identification code in FIX Tag 79 to properly route directed orders.

Who can receive a Directed Order?

Specialists, SQTs, or RSQTs that have agreed to accept directed order flow.

What are the Quoting Requirements for Specialists, SQTs and RSQTs for receiving Directed Orders?

Directed Specialists, SQTs and RSQTs have to fulfill specific quoting requirements as per PHLX rules.

A Directed SQT ("DSQT") or a Directed RSQT ("DRSQT") (as defined in Rule 1080(l)(i)(C)) shall be responsible to quote two-sided markets in the lesser of 99% of the series listed on the Exchange or 100% of the series listed on the Exchange minus one call-put pair, in each case in at least 60% of the options in which such DSQT or DRSQT is assigned. Whenever a DSQT or DRSQT enters a quotation in an option in which such DSQT or DRSQT is assigned, such DSQT or DRSQT must maintain until the close of that trading day quotations for the lesser of 99% of the series of the option listed on the Exchange or 100% of the series of the option listed on the Exchange minus one call-put pair. A Specialist as well as a Directed Specialist is obligated to quote continuous, two-sided markets in 99% or 100% minus one call-put pair of the series in each option in which such specialist is assigned. These obligations will apply collectively to all appointed issues rather than on an issue-by-issue basis.

When do Directed Quoting Requirements Apply?

Once an SQT or RSQT receives a directed order, from that time on they will be required to follow the quoting obligations listed above for all of the underlying names in which they are assigned.

What is the Allocation Process for Directed Orders that are sent to a Specialist, SQT, or RSQT?

Under the program, the Directed Specialist, SQT or RSQT are entitled to an enhanced participation allocation of up to 40% of an order after Customer interest at a given price is satisfied provided the Directed participants disseminated quotation price is the NBBO at the time of the Directed Order. If the Directed Specialist, SQT or RSQT is quoting a size of less than 40% of the incoming order, the Directed Specialist will participate up to its disseminated size. The remainder, if any, of the incoming directed order will be allocated based on PHLX’s Customer priority pro-rata algorithm. Please refer to PHLX Rules 1080 and 1014 for additional information.


PHLX XL Directed Order Flow Contacts