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Thursday, May 31, 2012

Options Trader Alert #2012 - 36
BX Options Launch Reminder and Update

Markets:

Contact Information:

What you need to know:

  • NASDAQ OMX BX Options (BX Options) is scheduled to launch June 29, 2012, pending Securities and Exchange Commission (SEC) approval.
  • BX Options will offer interfaces that are currently available on NASDAQ OMX PHLXSM (PHLX®) and The NASDAQ Options MarketSM (NOM).
  • Testing is available daily in the Options Test Facility.
  • Saturday Production tests will be held Saturday, June 9, 2012, and June 23, 2012.

What is changing?

As announced in OTA #31, NASDAQ OMX plans to launch a new options market, BX Options, on June 29, 2012, pending SEC approval. BX Options will offer an innovative approach through functionality and pricing to attract a rich participant mix. The new market will launch with a price/time priority execution algorithm.

After launch, BX Options will integrate additional functionality such as pro rata allocation with customer priority and directed participation in certain products. These enhancements will require additional SEC filings and approvals prior to implementation.

Have proposed BX Options rules been filed with the SEC?

Yes. The proposed rules are substantially similar to the NOM rules. The proposed rules are available on the BX Website (SR-BX-2012-30) and on the SEC website.

When will testing be available?

Testing is available daily in the BX Options Test Facility. Firms that would like to test must fill out a BX Options port request form to order test ports.

BX Options will also offer Saturday testing on the production system on the following dates:

  • June 9, 2012
  • June 23, 2012

Firms will need production ports for the Saturday Tests, which can be requested via the BX Options port request form.

Do firms need to register for the Saturday test?

Yes, firms should email NASDAQ OMX Trading Services to register for the test.

What symbols will be available for testing on June 9th and 23rd?

All Penny Pilot Options will be available for testing on both Saturday production tests.

What is the rollout schedule for BX Options?

BX Options will launch June 29, 2012 (pending SEC approval) with options based on 1-5 underlying securities.

What interfaces will be available for BX Options?

BX Options will share the common architecture utilized by NOM and PHLX. Participants on the new BX Options market will be able to leverage their current connectivity to NOM/PHLX and will only need new logically separate BX Options ports. To order ports, firms need to fill out the BX Options port request form.

The BX Options FIX specification is identical to the NOM FIX specification.

The BX Options SQF and Clearing Trade Interface (CTI) specifications are identical to the NOM and PHLX SQF and CTI specifications.

What market data will be available on BX Options?

BX Options will offer BX Top (identical to NOM BONO), BX Depth (identical to NOM ITTO) and BX Glimpse (identical to NOM Glimpse). Market data specifications can be found on the BX Options specifications page.

Bandwidth recommendations are 40 Mb for BX Top and 120 Mb for BX Depth.

How do firms order and connect to BX Options market data?

Data Feed Request forms and IP Address information are now available for BX Top and BX Depth.

What is the BX Options fee structure?

Transaction fees will be announced at a later date. There will be no initial fees for ports or market data.

Are there any fees associated with testing?

No. BX Options will not charge for testing or test ports.

How do firms become members of BX Options?

Firms should follow the membership instructions on the BX Options web page.

Are there BX Options membership fees?

Membership, application, distribution and trading rights fees will be waived for BX members that only conduct an options business on BX (i.e., no equity trading).

Where can I find more information?

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