Cboe EDGX Options Exchange

From MarketsWiki
(Redirected from EDGX Options)
Jump to: navigation, search
Cboe EDGX Options Exchange
Founded 2015
Products Options trading
Website http://markets.cboe.com/us/options/

Cboe EDGX Options Exchange is one of four options markets owned by Cboe Global Markets.

Before Cboe acquired the exchange in the purchase of Bats Global Markets in 2017, EDGX was the second options exchange owned by Bats. Then named Bats EDGX Options, it launched on November 2, 2015. Cboe rebranded it as Cboe EDGX Options Exchange after the acquisition.[1]

EDGX is based on a customer priority/pro rata allocation model and is designed to complement the Cboe BZX Options Exchange, which is a pure price-time, maker-taker model market.

EDGX Options is located in the Equinix NY5 data center, where the other BATS U.S. equities and option markets and its institutional foreign exchange ECN, Hotspot, are located. Members could begin connecting to the new market on August 17, 2015.

History

Bats first filed with the SEC to launch EDGX as a second options exchange on April 16, 2015 [2] and received SEC approval for the exchange on August 10, 2015. With the launch of EDGX Options, Bats hoped to compete for a new segment of order flow that did not trade on the price-time markets that Bats operated. The pro-rata market accounted for about two-thirds of the trading in the overall U.S. options market at the time.[3]

On November 1, 2019, Cboe officially launched Retail Priority on EDGX. Retail Priority offers an allocation model that differs from the traditional time-based allocation model used by most U.S. equities market centers that allocate trades to orders that arrive first in time at each price point. The Retail Priority model focuses on improving execution quality and trading outcomes for individual investors and the firms facilitating their orders, by reducing their time to execution. Under the mechanism, individual investors' displayed limit orders will post at the front of the order queue for same-priced orders submitted on Cboe EDGX. Thus it changes the order allocation priority model on EDGX to price-retail priority-time priority. [4] [5]

Products and Services

Options trading with a customer priority/pro rata allocation model

Key People

References

  1. BATS Receives SEC Approval to Launch EDGX Options Market. BATS Global Markets.
  2. Bats to launch its 2nd, industry’s 13th, options exchange. Press Release via MarketsMedia.
  3. BATS gets green light for new options market offering. Kansas City Business Journal.
  4. Cboe Retail Priority. Cboe.
  5. Cboe to Launch Order Book Priority for Retail Investors on EDGX Exchange. Cboe.