Thursday, April 20, 2017
Options Regulatory Alert #2017 - 14
Nullification and Adjustment of Complex Orders and Stock-Option Orders
On April 17, 2017, recent amendments to NASDAQ PHLX, LLC ("Phlx") Rule 1092 and Nasdaq ISE, LLC ("ISE") Rule 720 became effective. Phlx Rule 1092 and ISE Rule 720 generally describe the application of the nullification and adjustment of options transactions as they relate to complex orders and stock-option orders.
Amendments were made to Phlx Rule 1092 at Commentary .04 and ISE Rule 702 Supplementary Material .05 related to complex orders.
Complex Orders That Execute Against Individual Legs
Complex Orders That Execute Against Other Complex Orders
(i) the width of the National Spread Market for the complex order strategy just prior to the erroneous transaction was equal to or greater than the amount set forth in the wide quote table of paragraph (b)(3) or
(ii) the net execution price of the complex order is higher (lower) than the offer (bid) of the National Spread Market for the complex order strategy just prior to the erroneous transaction by an amount equal to at least the amount shown in the table in paragraph (c)(1).
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