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Thursday, March 14, 2013

Options Regulatory Alert #2013 - 2
UPDATED 3/21/13: Mini Options Handling on NOM, PHLX and BX Options

Markets Impacted:

Contact Information:

What you need to know:

  • NOM will begin trading Mini Options on Monday, March 18, 2013.
  • UPDATED 3/21/13: PHLX will begin trading Mini Options on Thursday, March 28, 2013.
  • BX Options will begin trading Mini Options at a date to be determined.
  • Market Maker Quote Obligations apply only to participants registered in Mini Options.
  • QCC Orders in Mini Options must be for a minimum size of 10,000 option contracts.
  • Complex Order rules applicable to standard contracts apply to Mini Options.
  • Complex Orders are not permitted which consist of both standard and Mini Option components.
  • Complex Orders involving both Mini Options and an equity component will not be accepted electronically.
  • Mini Option Orders may be entered into PIXL under the same rules as standard options.

What is being announced?

UPDATED 3/21/13: The NASDAQ Options MarketSM (NOM), NASDAQ OMX PHLX® (PHLXSM), and NASDAQ OMX BX OptionsSM (BX Options) will begin trading Mini Options on AAPL, AMZN, GLD, GOOG, and SPY. NOM will begin trading Mini Options on Monday, March 18, 2013. PHLX will begin trading Mini Options on Thursday, March 28, 2013. BX Options will begin trading Mini Options at a date to be determined.

What is the Minimum Price Variation (MPV) for quoting Mini Options?

Pending SEC approval, Mini Options will be quoted in the same MPV as the standard contracts of the same underlying.

What are the Quoting Obligations for Mini Options?

Mini Options and standard options on the underlying will be considered two separate appointments for the purpose of quoting obligations. Market Makers registered in the standard option class only and not registered in the Mini Option, will only be obligated to quote the standard options.

Are QCC Orders permitted in Mini Options?

Yes, QCC Orders are permitted in Mini Options but must be for a minimum size of 10,000 contracts. QCC Orders may not consist of both Mini Options and standard options.

Are Complex Orders permitted in Mini Options?

Yes, Complex Orders are permitted in Mini Options provided the components of such order are of a conforming ratio as defined in PHLX Rule 1080 Commentary .08(a)(ix) and only include Mini Options. Complex Orders may not consist of both Mini Options and standard options and Complex Orders involving Mini Options may not include a stock component. The PHLX XL system will reject Complex Orders involving Mini Options and a stock component.

Are Mini Option orders permitted in PIXL?

Yes, Mini Option orders may be entered into Price Improvement XL (PIXL). Such orders must conform to the rules as stipulated in PHLX Rule 1080(n). Orders of 50 contracts or more must be stopped at a price that is equal to or better than the National Best Bid/Offer (NBBO). Orders of less than 50 contracts must be stopped at a price that is at least one minimum price improvement increment better than the PHLX Best Bid/Offer (PBBO) and no worse than the NBBO.

How do Underlying Halts affect trading in Mini Options?

Trading in Mini Options will be halted when the underlying halts trading on the primary market. This is consistent with how underlying halts affect trading in standard options.

Where can I find additional information?


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