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Wednesday, March 18, 2020

Equity Trader Alert #2020 - 15
Update: Order Functionality Updates on PSX

Category:

  • New Functionality

Markets Impacted:

Contact Information:

Resources:

Subject to SEC filing requirements, Nasdaq PSX (PSX) will be implementing the modifications previously announced in Equity Trader Alert #2020 – 7 in mid Q2 2020. More information on the exact date will be forthcoming.

Specifically, PSX will be introducing modifications to the following:

  • Post Only orders
  • Midpoint orders during a crossed market
  • Minimum Acceptable Quantity (MAQ)

Modifications to Post Only Orders

PSX will be modifying the functionality of Post Only orders, allowing Post Only orders to lock contra-side non-displayed orders resting on the PSX book. Along with this change, PSX will introduce a new Trade Now functionality, allowing participants to instruct the Exchange to allow a resting order, that becomes locked by a contra-side displayed order, to remove liquidity against such locking contra-side orders. For participants interested in using the Trade Now functionality, please contact Nasdaq Trading Services to enable the functionality on your order entry ports.

In addition, PSX will be introducing two new optional port/MPID settings for Post Only orders, allowing Post Only orders to be cancelled if the order, upon entry, would be price slid due to locking or crossing a protected quote of another market center or a resting displayed order on the PSX book.

Please see additional details here.

Modifications to Midpoint Orders During a Crossed Market

PSX will be modifying the handling of midpoint orders during a crossed market. Midpoint orders received during a crossed market will be rejected, and resting midpoint orders on the PSX book will be canceled if entered through OUCH or FLITE and updated to the new midpoint if entered through other order entry protocols.

MAQ Updates

PSX will update MAQ functionality to include a new optional feature that avoids aggregation of contra-side orders to fulfill the minimum quantity designation on an incoming order. The new optional feature for MAQ allows participants to configure their MPID to only allow MAQ orders to execute when one contra-side order is equal to or greater than the minimum quantity designation on the order.

Testing Opportunities

Testing is currently available in the Nasdaq Testing Facility (NTF). Production testing will be available during the April 4th and May 2nd UATs.

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Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.

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