Friday, March 25, 2011

Options Trader Alert #2011 - 12
The NASDAQ Options Market Updates Timing of NOM 2.0 Technology Enhancements

Markets Impacted:

Contact Information:

What you need to know:

  • As announced in Options Trader Alert #2010-78, NASDAQ OMX® is planning several technological enhancements and updates for The NASDAQ Options MarketSM (NOM), referred to as NOM 2.0, to provide richer functionality.
  • These changes will be implemented in the third quarter of 2011.
  • Some of the NOM 2.0 enhancements and changes are subject to filing with the Securities and Exchange Commission (SEC).

What has been announced?

The technological enhancements and updates referred to as NOM 2.0 – announced in Options Trader Alert #2010-78 and subject to filing with the SEC – will be implemented in the third quarter of 2011. A more specific date will be announced when it becomes available.

Along with providing richer functionality for NOM membership, 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.

What enhancements are being made to NOM?

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.

When will testing be available to members?

Member firms will have the opportunity to begin testing in the NASDAQ Options Test Facility (OTF) beginning June 1, 2011.

What functionality will be available for testing?

Member firms will be able to test all NOM 2.0 functionality.

Will testing be available on the NOM 2.0 production system prior to rollout?

Yes. Saturday test sessions will be conducted using the NOM 2.0 and current NOM production systems. The Saturday test dates will be announced when they become available.

What interfaces will be available on 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.

When will NOM 2.0 interface specifications be available?

NOM 2.0 interface specifications are currently posted on the NOM website as announced in Options Technical Update #2011-3.

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 market data specifications for NOM 2.0 be available?

NOM 2.0 market data specifications are currently posted on the NOM specification webpage as announced in Data Technical News #2011-7.

Where can I find more information?

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