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Friday, April 23, 2010

Options Technical Update #2010 - 11
The NASDAQ Options Market Provides Guidance on Handling GTC Orders During OSI Consolidations

Markets Impacted:

Contact Information:

What you need to know:

  • As announced in Options Trader Alert #2010-23, The NASDAQ Options MarketSM (NOM) began offering Good-Til-Cancelled (GTC) Orders on April 12, 2010.
  • Class consolidations for the Options Symbology Initiative (OSI) began on Friday, March 12, 2010, and are scheduled to complete on Friday, May 14, 2010.
  • A class consolidation is scheduled for Friday, April 23, 2010, to be effective for Monday, April 26, 2010.
  • As part of this process, option symbols in those classes being consolidated will be converted into their OSI-compliant format — in most cases, the same as the underlying symbol name.
  • During weekend consolidations, NOM will not convert any open GTC orders in the affected classes to the consolidation format.
  • Firms should cancel their GTC orders in those symbols in the classes being consolidated no later than 4:30 p.m., Eastern Time (ET), on the Friday of the consolidation event and re-enter them on Monday morning beginning at 8:00 a.m., ET.
  • Any orders not cancelled by the firms will be cancelled by NOM.

What are the OSI consolidation events?

Class consolidations for OSI began on Friday, March 12, 2010, and are scheduled to complete on Friday, May 14, 2010. As part of the consolidation process, option symbols in those classes to be consolidated will be converted into their OSI-compliant format — in most cases, the same as the underlying symbol name.

OSI consolidation is currently scheduled for the following remaining dates:

  • Friday, April 23, 2010 – Effective for Monday, April 26, 2010
  • Friday, May 7, 2010 – Effective for Monday, May 10, 2010
  • Friday, May 14, 2010 – Effective for Monday, May 17, 2010

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

Are GTC orders affected by the consolidation events?

Yes. During weekend consolidation, NOM will not convert any open GTC orders in the affected classes to the consolidation format. Firms should cancel their GTC orders in symbols that are being consolidated.

When can GTC orders be cancelled?

Firms are reminded that GTC orders in the symbols affected by the weekend consolidations can be cancelled at any time during normal system hours. On the Friday of a consolidation weekend, firms can also cancel their GTC orders after market close through 4:30 p.m., ET. Firms are reminded of the following information regarding cancelling of their GTC orders:

  • Cancellations must be “straight cancels,” not cancel/replacements.
  • Firms that send a cancel request will receive the normal response to their cancel via their FIX interface (Tags 39 and 150 will have a value of “4”).
  • Firms should carefully verify all orders have been properly cancelled based on these responses.

Will NOM cancel any remaining orders that have not been cancelled?

Yes. At approximately 4:30 p.m., ET, NOM will begin cancelling any remaining GTC orders in the symbols being consolidated that weekend.

What notification or messaging is available for those orders being cancelled by NOM?

Firm lines will remain connected until 4:35 p.m., ET. If a firm is still connected during that period, they will receive an unsolicited out for the orders being cancelled by the exchange.

When can cancelled orders be re-entered?

All orders, including GTCs, can be entered into the system beginning at 8:00 a.m., ET, on the Monday morning following a consolidation weekend.

Where can I find more information?


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