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Wednesday, July 18, 2018

Options Regulatory Alert #2018 - 17
NOM and BX Intra-day Electronic Quoting Requirements

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  • System Impact

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Below is a reminder of the intra-day quoting obligations for NOM and BX Market Makers, respectively. A BX Market Maker is required to meet each market making obligation separately. A BX Market Maker who is also the Lead Market Maker will be held to the Lead Market Maker obligations in options series in which the Lead Market Maker is assigned and will be held to Market Maker obligations in all other options series where assigned. A BX Market Maker who receives a Directed Order shall be held to the standard of a Directed Market Maker in all options series for all underlying symbols the Market Maker is assigned.

NOM and BX Market Makers:

Rule RequirementChapter VII, Section 6(d)
Percentage of Series to be QuotedMarket Makers, associated with the same Options Participant, are collectively required to provide two-sided quotations in 60% of the cumulative number of seconds, or such higher percentage as the exchange may announce in advance, for which that Options Participant’s assigned options series are open for trading.
Exceptions to Quoting RequirementsQuarterly Option Series, any adjusted option series, and any option series with an expiration of nine months or greater
Quote Width RequirementsNo wider than $5 between the bid and offer

BX Lead Market Makers:

Rule RequirementChapter VII, Section 14(f)
Percentage of Series to be QuotedA Lead Market Maker, associated with the same Options Participant, is collectively required to provide two-sided quotations in 90% of the cumulative number of seconds, or such higher percentage as BX may announce in advance, for which that Option Participant’s assigned options series are open for trading.
Exceptions to Quoting RequirementsQuarterly Option Series, any adjusted option series, and any option series with an expiration of nine months or greater
Quote Width RequirementsNo wider than $5 between the bid and offer

Directed Market Makers:

Rule RequirementChapter VII, Section 15(iii)
Percentage of Series to be QuotedDirected Market Makers, associated with the same Options Participant, are collectively required to provide two-sided quotations in 90% of the cumulative number of seconds, or such higher percentage as BX may announce in advance, for which that Options Participant’s assigned options series are open for trading. An Options Participant shall be considered directed in all assigned options once the Options Participant receives a Directed Order in any option in which they are assigned and shall be considered a Directed Market Maker until such time as an Options Participant notifies the Exchange that they are no longer directed.
Exceptions to Quoting RequirementsQuarterly Option Series, any adjusted option series, and any option series with an expiration of nine months or greater
Quote Width RequirementsNo wider than $5 between the bid and offer

The Exchange will calculate the percentage of the series to be quoted by (i) taking the total number of seconds the Options Participant disseminates quotes in each assigned options series, excluding Quarterly Option Series, any adjusted option series, and any option series with an expiration of nine months or greater; and (ii) dividing that time by the eligible total number of seconds each assigned option series is open for trading that day. Quoting is not required in every assigned options series. Compliance with this requirement is determined by reviewing the aggregate of quoting in assigned options series for the Options Participant.

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