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Tuesday, August 4, 2009

Options Trader Alert #2009 - 41
The NASDAQ Options Market Announces Interface Testing for Compliance with the Options Symbology Initiative

Markets Impacted:

  • The NASDAQ Options Market

Contact Information:

What you need to know:

  • All firms must be in compliance with the Options Symbology Initiative (OSI) no later than February 12, 2010.
  • To ensure readiness, firm testing of trading platform interfaces is mandatory.
  • Testing will be available 8:00 a.m. to 5:00 p.m., ET, Monday through Friday in the NASDAQ Test Facility beginning Monday, August 31, 2009. Firms must pre-register for testing.

What is the Options Symbology Initiative?

The Options Symbology Initiative (OSI) is intended to replace the use of Options Price Reporting Authority (OPRA) codes to identify option series.

The initiative is accomplished in two main phases:

  • Conversion – Conversion from dependence on OPRA codes to use of explicit series elements. During this phase of OSI, the current root symbols will be used with the explicit elements specified above.
  • Consolidation – Consolidating all options roots into the issue symbol. After the consolidation, the current root symbol for the product(s) consolidated will no longer be used.

For complete details of the OSI plan, industry testing dates and implementation dates, refer to the Options Clearing Corporation (OCC) website.

What interfaces are affected?

All trading platform interfaces for The NASDAQ Options Market are affected by the OSI initiative. The modifications to support OSI conversion and consolidation will be available for the following products to support firm testing:

  • FIX for Options
  • OUCH to Trade Options (OTTO)
  • ITCH to Trade Options (ITTO)
  • NASDAQ Options Depth at Price (DAP)
  • Best of NASADQ Options (BONO)
  • Options NOIView

In the test facility and production, the FIX for Options interface currently supports Tag 205 Expiration Day in the messaging and also uses current option root symbols.

Is testing required?

Testing is mandatory. The nature of the OSI initiative does not allow the continued use of OPRA codes after February 12, 2010, nor will firms be able to use the existing one-to-three character root symbols of a given issue once that issue undergoes consolidation. Failure to be ready for these dates will leave a firm unable to input orders or quotes or generally to trade options.

When is testing available?

Testing is available 8:00 a.m. to 5:00 p.m., Eastern Time (ET), Monday through Friday in the NASDAQ Test facility (NTF) beginning Monday, August 31, 2009.

How can I register for testing?

Firms must register for testing in advance by contacting NASDAQ OMX Trading Services at +1 212 231 5180.

Testing information including pertinent testing procedures as well as a set of recommended test cases will be provided on initial contact. Test cases were chosen to cover the conversion phase as well as the consolidation phase.

Where can I find more information?

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