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Tuesday, December 14, 2010

Options Trader Alert #2010 - 78
The NASDAQ Options Market Announces Technology Enhancements

Markets Impacted:

Contact Information:

What you need to know:

  • NASDAQ OMX® is planning several technological enhancements and updates for The NASDAQ Options MarketSM (NOM) to provide richer functionality.
  • NOM plans to implement these changes in late April 2011.
  • NASDAQ OMX will refer to the implementation of the enhancements as NOM 2.0.
  • Some of the NOM 2.0 enhancements and changes are pending filing with and approval by the Securities and Exchange Commission (SEC).

What has been announced?

NASDAQ OMX is planning several technological enhancements and updates for NOM, pending filing with and approval by the SEC, in order to provide richer functionality to its membership. Additionally, the enhancements will align NOM technology with NASDAQ OMX PHLXSM (PHLX®) technology, which will offer common interface and market data formats, allowing firms to streamline business and development efforts across the two exchanges.

NOM plans to implement these changes in late April 2011.

NASDAQ OMX will refer to the implementation of the enhancements as NOM 2.0.

What enhancements are being made?

Upon its launch, NOM 2.0 will support the following:

  • Specialized Quote Feed (SQF) 6.1, which will be equivalent to the bulk quoting interface on PHLX
  • “Rapid Fire and Purge” (same as the PHLX XL Risk Monitor Mechanism)
  • Order Price Protection (“Fat Finger” protection)
  • Acceptable Trade Range (ATR)
  • Auctions coming out of trading halts
  • Increased capacity

Furthermore, NOM 2.0 FIX and PHLX FIX will migrate to a common format, and NOM 2.0 Best of NASDAQ Options (BONO) and PHLX Top of PHLX Options (TOPO) will be moved toward a common format.

How will firms access NOM 2.0?

Firms should note the following regarding access to NOM 2.0:

  • Market makers will be able to use SQF 6.1 or OUCH to Trade Options (OTTO) for market making activities. SQF 6.1 and OTTO will only be available for market making.
  • All participants will be able to use FIX for order entry into NOM 2.0.
  • The NOMAD interface will be retired.

What market data will be available on NOM 2.0?

ITCH To Trade Options (ITTO) and BONO will be available in binary format for NOM 2.0.

NASDAQ Options Depth at Price (DAP) will be retired.

When will interface specifications be available for NOM 2.0?

Interface specifications will be available for NOM 2.0 in late December 2010.

When will market data feed specifications be available for NOM 2.0?

Market data feed specifications will be available for NOM 2.0 in late December 2010.

Where can I find more information?



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