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Friday, March 20, 2020

Options Regulatory Alert #2020 - 6
PHLX, NOM, BX, ISE, GEMX and MRX - Bid/Ask Differentials for "MKL", "NDX" and "BKNG" Options Classes through June 19, 2020

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  • Regulatory

Markets Impacted:

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Effective March 23, 2020, the below market maker quote width requirements for options overlying MKL, NDX and BKNG on Nasdaq PHLX (PHLX), The Nasdaq Options Market (NOM), Nasdaq BX (BX Options), Nasdaq ISE (ISE), Nasdaq GEMX (GEMX) and Nasdaq MRX (MRX) will be effective through June 19, 2020. The exchanges may, in their discretion, amend the bid/ask differentials by providing notice to members.

“Please note the highlighted changes below from the previous month bid/ask differentials.”

The PHLX, ISE, and GEMX bid/ask differentials for NDX and BKNG option classes, PHLX bid/ask differentials for MKL option class and MRX bid/ask differentials for BKNG option class for electronic opening Valid Width Quotes and PHLX open outcry quotes are as follows:

  • If the bid is under $2, the bid/ask spread may be up to $1.50 wide.
  • If the bid is from $2 to $4.90, the bid/ask spread may be up to $2.00 wide.
  • If the bid is from $5 to $9.90, the bid/ask spread may be up to $3 wide.
  • If the bid is from $10 to $19.90, the bid/ask spread may be up to $6 wide.
  • If the bid is from $20 to $39.90, the bid/ask spread may be up to $12 wide.
  • If the bid is from $40 to $79.90, the bid/ask spread may be up to $24 wide.
  • If the bid is from $80 to $199.90, the bid/ask spread may be up to $36 wide.
  • If the bid is from $200 or greater, the bid/ask spread may be up to $44 wide.

The PHLX, ISE, GEMX and MRX bid/ask differentials for BKNG option classes and PHLX and NOM bid/ask differentials for MKL option class; electronic intra-day quotes shall be as follows:

  • If the bid is under $200, the bid/ask spread may be up to $20 wide.
  • If the bid is from $200 or greater, the bid/ask spread may be up to $22 wide.

The updated PHLX, ISE* and GEMX* bid/ask differentials for NDX* option class electronic intra-day quotes shall be as follows:

  • If the bid is under $200, the bid/ask spread may be up to $40 wide.
  • If the bid is from $200 to $399.90, the bid/ask spread may be up to $44 wide.
  • •If the bid is from $400 or greater, the bid/ask spread may be up to $100 wide.

*Please note that a PHLX index option series with an expiration of 9 months or greater has no bid/ask differentials requirements. For ISE and GEMX index option series with an expiration of 12 months or greater has no bid/ask differentials requirements.

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