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Product LoginWednesday, December 9, 2009
Options Trader Alert #2009 - 67
NASDAQ OMX PHLX to Introduce Make/Take Pricing in SPY Options
Markets Impacted:
- NASDAQ OMX PHLX
Contact Information:
- Transaction Services U.S. Market Sales at +1 800 846 0477
What you need to know:
- NASDAQ OMX PHLX will implement make/take pricing for electronic trading in SPY for trades settling on or after Monday, January 4, 2010 (trade date December 31, 2009), pending filing with the SEC.
- Customers, Specialists, Streaming Quote Traders (SQTs) and Remote Streaming Quote Traders (RSQTs) will receive a rebate when adding liquidity in SPY.
- All electronic auctions will be free for these participants.
- Directed order flow will remain intact as well as the PHLX pro-rata allocation model.
What is changing?
NASDAQ OMX PHLXSM (PHLX®) will implement a new fee schedule for electronic trading in SPY options for trades settling on or after Monday, January 4, 2010 (trade date December 31, 2009), pending filing with the Securities and Exchange Commission (SEC).
What is the new fee schedule?
The new fee schedule for electronic executions in SPY options, assessed per contract side, will be as follows:
| Non-Directed Customer | Directed Customer | Directed Participant | Specialist, SQT and RSQT |
Firm | Broker-Dealer | |
|---|---|---|---|---|---|---|
| Rebate for Adding Liquidity | $0.05 | $0.20 | $0.25 | $0.20 | $0.00 | $0.00 |
| Fee for Adding Liquidity | $0.00 | $0.00 | $0.00 | $0.00 | $0.35 | $0.45 |
| Fee for Removing Liquidity | $0.40 | $0.25 | $0.30 | $0.40 | $0.45 | $0.45 |
- Fee caps or discounts will not apply to electronic executions in SPY.
- SPY volume will not be eligible for the Market Access Provider (MAP) program.
- No payment for order flow will be collected.
- The new fee schedule does not affect the Options Floor Broker Subsidy.
- The new fee schedule does not apply to Linkage orders.
- Cancellation fees will still apply.
Who is a Directed Participant?
Directed Participants are Specialists, Streaming Quote Traders (SQTs) and Remote Streaming Quote Traders (RSQTs) who trade against an order directed to them for execution.
How is a Directed Customer order defined for the purposes of this new fee?
A Directed Customer order is defined as an order directed to a Directed Registered Options Trader (ROT) or Directed Specialist for execution.
What is the fee for PHLX auctions?
The opening and all other electronic SPY auctions will be free for Non-Directed Customers, Directed Customer, Specialists, SQTs and RSQTs. Please refer to PHLX Rule 1080 for further details.
Does the new fee schedule apply to electronically-executed Complex Orders in SPY?
If a portion of Complex Order is executed against an individual order or quote, the Complex Order side of the transaction will be free and the individual side will be subject to the new fee schedule.
Complex Order to Complex Order transactions will remain subject to the standard PHLX Equity Options Fee Schedule.
Does the new fee schedule apply to floor-based transactions in SPY?
No, if both sides of the transaction are executed in open outcry, the standard PHLX Equity Options Fee Schedule will apply.
If one side of the trade is executed via the Floor-Based Management System (FBMS), the new fee schedule will apply to both sides of the transaction.
Does this change affect the PHLX market model?
No, the PHLX pro-rata execution model and directed order flow program will remain unchanged.
Where can I find more information?
- Contact Transaction Services U.S. Market Sales at +1 800 846 0477.
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