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Friday, April 03, 2009

Options Trader Alert #2009 - 11
The NASDAQ Options Market Announces New Pricing Effective Monday, April 13, 2009

Markets Impacted:

  • The NASDAQ Options Market

Contact Information:

What you need to know:

  • Effective Monday, April 13, 2009, The NASDAQ Options Market will implement new pricing, subject to filing with the Securities and Exchange Commission (SEC).
  • The NASDAQ Options Market is expanding the list of options in which orders with an account type of “Customer” remove liquidity for free to all Penny Pilot options.
  • The NASDAQ Options Market is introducing a rebate of $0.20 per executed contract for orders with an account type of "Customer" that remove liquidity on Non-Penny Pilot options.
  • Market Makers and firms will receive a rebate of $0.25 per executed contract for providing liquidity in Penny Pilot options and will be charged a fee of $0.30 per executed contract for providing liquidity in non-Penny Pilot options.

What is changing?

Effective Monday, April 13, 2009, The NASDAQ Options MarketSM will implement new pricing, subject to filing with the Securities and Exchange Commission (SEC).

The complete transaction fee pricing schedule will be as follows:

Pricing
(per executed contract)
Customer Firm Market Maker
Penny Pilot Options:      
Rebate to Add Liquidity $0.25 $0.25 $0.25
Fee for Removing Liquidity FREE $0.45 $0.45
All Other Options:      
Fee for Adding Liquidity FREE $0.30 $0.30
Rate for Removing Liquidity $0.20 rebate $0.45 fee $0.45 fee

 

For the complete fee schedule please refer to The NASDAQ Options Market pricing page on the NASDAQ OMX Trader® website.

In which options is it free to remove liquidity?

As announced in Options Trader Alert #2009-2, The NASDAQ Options Market began allowing orders with an account type of "Customer" to remove liquidity for free in specific securities. The NASDAQ Options Market is expanding the list to all options in the Penny Pilot program.

What is the rebate for removing liquidity in Non-Penny Pilot Options?

The rebate for removing liquidity in options not included in the Penny Pilot program will be $0.20 per executed contract for orders with an account type of “Customer.”

How does the new pricing affect firms and Market Makers?

Firms and Market Makers will receive a rebate of $0.25 per executed contract for providing liquidity in Penny Pilot options and be charged a fee of $0.30 per executed contract for providing liquidity in non-Penny Pilot options. The fee for removing liquidity for firms and market makers will remain $0.45 per executed contract.

How does this new pricing affect broker-dealer facilitation transactions?

Facilitation transactions will be charged a net fee of $0.10 per executed contract. This is similar to the existing fee structure where facilitation transactions incur a net fee of $0.10 or $0.15 per contract, depending on the price of the transaction.

What is The NASDAQ Options Market’s market share in some of the options affected by this pricing change?

Underlying Option Market Share Percentage
SPY 9.12%
QQQQ 6.50%
AAPL 6.12%
GS 5.23%
DIA 5.22%
POT 4.96%
AMZN 4.45%
WMT 3.92%
GOOG 3.59%
MS 3.54%

Market share for March 2009. Source: Options Clearing Corporation

Where can I find more information?



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