Friday, October 12, 2012
Options Trader Alert #2012 - 58
BX Options Introduces Customer Priority Pro Rata on November 1, 2012
What you need to know:
What is changing?
Effective Thursday, November 1, 2012, BAC, QQQ and RIMM executions will be allocated pro rata on NASDAQ OMX BX OptionsSM (BX Options). All other options will continue to execute in price/time priority.
How does the pro rata execution algorithm work?
As per SEC rule filing SR-BX-2012-065, Customer orders have priority over all other participant types and will execute in time priority among all Customer orders at a given price.
After all Customer orders at a given price are executed, executions will be allocated pro rata among Market Maker interest based on their size as a percentage of the total size among all Market Makers at that price level.
After all Customer orders and Market Maker interest are executed, any remaining executions will be allocated pro rata among all other participant interest at that price level.
Will other options trade via the pro rata execution algorithm in the future?
Yes. BX Options plans to add additional names to the list of products subject to the pro rata execution algorithm. The BX Options System Settings Page lists the execution algorithm each product trades under and will be updated anytime the execution algorithm changes for a given product. BX Options will send additional communication when the execution algorithm of a given product changes.
Where can I find more information?
- Refer to the SEC Rule Filing SR-BX-2012-065.
- Refer to the BX Options System Settings Page on the NASDAQ Trader® website.
- Contact BX Options Market Operations at +1 215 496 1571.
About the NASDAQ OMX Group: The NASDAQ OMX Group, Inc. is the world's largest exchange company. It delivers trading, exchange technology and public company services across six continents, with more than 3,600 listed companies. NASDAQ OMX offers multiple capital raising solutions to companies around the globe, including its U.S. listings market, NASDAQ OMX Nordic, NASDAQ OMX Baltic, NASDAQ OMX First North, and the U.S. 144A sector. The company offers trading across multiple asset classes including equities, derivatives, debt, commodities, structured products and exchange-traded funds. NASDAQ OMX technology supports the operations of over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries. NASDAQ OMX Nordic and NASDAQ OMX Baltic are not legal entities but describe the common offering from NASDAQ OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius. For more information about NASDAQ OMX, visit www.nasdaqomx.com.