Nasdaq Speeds Up Options Trades with New Auction Twists
Published Date: 8/13/2025
Notice
Summary
Nasdaq PHLX is upgrading how some options trades happen by adding new auction types and changing where certain orders can be matched. This affects traders using PIXL and other order types, aiming to make trading faster and more flexible starting right away. These changes could help customers get better prices and smoother trades without extra costs.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
New Block Order Auction (50+ contracts)
The Exchange will add a Block Order Mechanism for single-leg "block-sized" orders defined as 50 or more contracts. Responses to a Block Order are anonymous, non-firm, and members have between 100 milliseconds and 1 second to respond; executions occur at a single block execution price and Public Customer interest at that price is executed first. Orders and Responses in the Block Order Mechanism (and market orders that receive the block execution price) may receive executions at penny increments.
Facilitation Auctions and 40% Allocation
The Exchange will adopt a Facilitation Mechanism (and a Complex Facilitation Mechanism) that lets a member facilitate a block-size agency order as principal. The facilitating member may be allocated up to 40% (or a lower percentage requested by the member) of the original order size after better-priced Responses and Public Customer interest are executed. The Facilitation broadcast timer is set to 100 milliseconds and the rule includes an auto-match option for the facilitating member.
Price-Check and Public Customer Protections
The Exchange requires orders entered into the Facilitation and related auction mechanisms to be priced equal to or better than the better of the internal PBBO (internal best bid/offer) or the NBBO on the same side at the start of the auction, and equal to or better than the opposite-side ABBO; if a Public Customer order is on the BBO/internal PBBO, the facilitation order must be entered at an improved price over that Public Customer order. Also, if a trading halt is initiated after an order is entered into an auction, the auction will terminate without execution.
PIXL Rule Changes and Cross Order Relocation
The Exchange will amend its PIXL rules to align certain functionality to ISE's PIM and will permit Customer Cross Orders (Options 3, Section 12(a)) and Complex Cross Orders (Options 3, Section 12(b)) to transact outside the current PIXL mechanism where they currently transact. The proposal is part of the same technology migration filing made on August 5, 2025.
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