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Friday, February 28, 2025

Equity Trader Alert #2025 - 13
Nasdaq Pricing Update Effective March 3, 2025

Category:

  • Pricing

Markets Impacted:

Contact Information:

Resources:

Pending filing with the SEC, the following pricing changes will be effective Monday, March 3, 2025 on Nasdaq.

New

1.The following rebate will be introduced:

Rebate to Add Displayed Liquidity, Shares Executed at or Above $1.00 (based on consolidated U.S. average daily share volume)

Per Share Executed

Liquidity Code
  1. 1% add* of TCV*;and
  2. 0.30% add* in Tape B securities;and
  3. 0.25% add* of non-displayed liquidity (other than midpoint orders) and M-ELO

* in securities priced at or greater than $1

$0.0030

A, 7, 8, or u

 

2.The following rebate/fee will be introduced for the pre-market session+:

Rebates and Fees, Shares Executed Below $1.00

(during the pre-market session+)

Per Share Executed

Liquidity Code

Rebate to Add Liquidity

0.05% (i.e. 5 basis points) of total dollar volume

A, 7, 8, e,
J, k, 0, or u

Fee to Remove Liquidity

0.15% (i.e. 15 basis points) of total dollar volume

R or m
+Pre-Market Session means the trading session that begins at 4:00 a.m. and continues until 9:30 a.m.

Amended Fees (new additions/changes highlighted below)

The following fees will be amended:

1. Execution Fees for the NASDAQ Opening Cross

Each firm's Opening Cross charges from orders that execute in the Opening Cross (in securities priced at or above $1.00) will be capped at $35,000 per month, provided that firm adds one million shares of liquidity, on average, during the month.

Order Type

Fee for Opening Cross
Per Share Executed

Liquidity Code

Opening Cross Orders for Shares Executed Below $1.00

0.25% (i.e. 25 basis points) of total dollar volume

O or M

 

2. RFTY Strategies (Retail Order Process)

All U.S. Equities

Per Share Executed

Liquidity Code

Fee for shares executed in excess of 8 million 4 million shares in the month that remove liquidity on Nasdaq or execute on other protected Reg NMS venues, excluding taker-maker venues

$0.0025

$0.0030

R, m,

D, B, P,

X, Y, T,

F, E, G,

U, or S

1. Fee for shares executed below 8 million 4 million shares in the month that remove liquidity on Nasdaq or execute on other protected Reg NMS venues, excluding taker-maker venues;

or

2. Above 8 million 4 million shares executed in the month that remove liquidity on Nasdaq or execute on other protected Reg NMS venues than Nasdaq Center during regular market hours, provided that the member adds at least 3 million shares ADV of designated retail add volume during the month

Free

R, m,
D, B, P,
X, Y, T,
F, E, G,
U, or S

 

3. Rates to Route Shares below $1.00

All U.S. Equities

Per Share Executed

Liquidity Code

Fee for orders executed in the NASDAQ facility during the pre-market session+

0.15% (i.e. 15 basis points) of total transaction cost


Rebate for orders that add liquidity in the NASDAQ facility during the pre-market session+

0.05% (i.e. 5 basis points) of total transaction cost


+Pre-Market Session means the trading session that begins at 4:00 a.m. and continues until 9:30 a.m.

Discontinued Fee

The following fee will be discontinued:

Excessive Messaging Policy

The NASDAQ Stock Market (NASDAQ) has introduced an Excessive Messaging Policy that encourages active quoting near the NBBO while discouraging excessive order activity away from the inside.

Member firms that exceed a "Weighted Order-to-Trade Ratio" of 100:1 pay a fee on the orders that cause the firm to exceed the threshold. The weighting factors are as follows:

Order's Price vs NBBO upon entry

Weighting factor

0% - 0.20% away

0x

0.20% - 0.99% away

1x

1% - 1.99% away

2x

2% or more away

3x

Firms that exceed the Weighted Order-to-Trade Ratio threshold of 1,000:1 will pay a $0.01 penalty on each order that caused the firm to surpass the threshold.

Firms that exceed the Weighted Order-to-Trade Ratio threshold of 100:1 but less than 1,000:1 will pay a $0.005 per order penalty on all orders that caused the firm's ratio to exceed 100:1.

Example

  • ABCD sends the following displayed, liquidity-providing orders:
    • 1,000,000 orders at the NBBO (weighting factor: 0x), of which 7,000 trade
    • 500,000 orders 1.5% away from the NBBO (weighting factor: 2x), of which 1,000 trade
       
  • ABCD's Weighted Order-to-Trade Ratio is 125:1
    • Weighted Order Count: 1,000,000 (1,000,000 x 0 + 500,000 x 2)
    • Orders executed (i.e., Trades): 8,000
    • Therefore, the ratio is 125 = (1,000,000 weighted orders / 8,000 orders executed)
  • Based on 8,000 orders executed, ABCD needed a weighted order count of 800,000 orders to meet the 100:1 threshold
    • Therefore, the Excessive Order quantity is: 200,000 = (1,000,000 - 800,000)
    • ABCD will incur a penalty of $0.005 on their 200,000 excessive orders

Notes

Only displayed, liquidity-providing orders received during regular market hours are included in the Weighted Order-to-Trade Ratio calculation.

Non-displayed orders, Immediate-or-Cancel (IOC) orders and Auction orders are excluded from the calculation

Orders sent by Registered Market Makers in their registered securities will not be included in the calculation.

Firms sending less than 100,000 weighted orders daily will not incur penalties.

Registered Nasdaq market makers that are registered in 100 or more issues will be exempt from this fee.
   

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