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Friday, January 15, 2010

Options Technical Update #2010 - 2
Reminder: Migration to OSI-Compliant Interfaces Required for Trading on The NASDAQ Options Market

Markets Impacted:

  • The NASDAQ Options Market

Contact Information:

What you need to know:

  • In February 2010, U.S. options markets will begin the Conversion phase as outlined by the Options Symbology Initiative (OSI).
  • In order to be prepared for trading on The NASDAQ Options Market under the new symbology plan, all firms must upgrade to the most recent OSI-compliant versions of the trading system interfaces.
  • Testing is mandatory; it is available 9:00 a.m. to 5:00 p.m., ET, Monday through Friday in the NASDAQ Testing Facility.
  • Test cases are available to cover the Conversion phase as well as the Consolidation phase.
  • The NASDAQ Options Market strongly suggests, upon completion of testing, firms upgrade their production interfaces to the OSI-compliant versions in advance of the Conversion phase beginning on February 12, 2010.
  • The NASDAQ Options Market Symbol Directory information will be updated on February 12, 2010, in accordance with the symbology initiative.

What trading interfaces are affected by the Options Symbology Initiative?

All of the The NASDAQ Options MarketSM (NOM) trading system interfaces are affected by the Options Symbology Initiative (OSI) and have OSI-compliant versions available for upgrading:

Trading System Interfaces

  • FIX to Trade Options
  • OUCH to Trade Options (OTTO)
  • NOMAD
  • NOMAD/OTTO DROP
  • FIX DROP

Where can I find the updated specifications?

The specifications for all of the OSI-compliant interfaces and market data feeds are available on the NASDAQ OMX Trader® website.

How will symbols be represented on the NOM interfaces once upgraded?

Once a firm has upgraded its NOM interface(s) to the OSI-compliant version(s), symbols will be represented in the same manner as they will be when the Conversion phase of Options Symbology takes place on February 12, 2010. Options Price Reporting Authority (OPRA) codes will no longer be utilized, fractional strike prices will not be supported, and the explicit series information will be required (Expiration Year, Month and Day; Strike Price and Call/Put). Upon upgrading to the latest OSI-compliant version of FIX, Tag 205 (Expiration Day) will become a mandatory field and will be validated on entry.

How will symbols be represented in the NOM Symbol Directory file on the NASDAQ OMX Trader website?

Beginning on February 12, 2010, the symbol directory file for NOM will utilize the options symbol root and will no longer contain the OPRA codes representing strike price, expiration month and put/call indicator. The following are examples of entries for pre conversion, post conversion and post consolidation.

Pre-Conversion representation

Options Symbol|Options Closing Type|Options Type|Expiration Date|Explicit Strike Price|Underlying Symbol|Underlying Issue Name|Pending

DLYEB|N|C|05/22/2010|10.000|DELL|DELL INC ##|N


Post-Conversion representation:

Root Symbol|Options Closing Type|Options Type|Expiration Date|Explicit Strike Price|Underlying Symbol|Underlying Issue Name|Pending

DLY|N|C|05/22/2010|10.000|DELL|DELL INC ##|N


Post-Consolidation representation:

Root Symbol|Options Closing Type|Options Type|Expiration Date|Explicit Strike Price|Underlying Symbol|Underlying Issue Name|Pending

DELL|N|C|05/22/2010|10.000|DELL|DELL INC ##|N

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 9:00 a.m. to 5:00 p.m., Eastern Time (ET), Monday through Friday in the NASDAQ Options Testing Facility (NTF).

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 upon registration. Test cases were chosen to cover the Conversion phase as well as the Consolidation phase.

Are OSI-compliant versions of market data feeds also available?

Yes, OSI-compliant versions of Best of NASDAQ Options (BONO), ITCH to Trade Options (ITTO), Depth at Price (DAP) and Options NOIView are available. Refer to Data Technical News #2009-62 for more information on OSI-compliant market data feeds.

Where can I find more information?


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