Options Trading Gets Tweaked: Nasdaq ISE Improves Complex Orders
Published Date: 9/16/2025
Notice
Summary
Nasdaq ISE is updating its Complex Price Improvement Mechanism and other trading rules to make options trading smoother and fairer for everyone involved. These changes affect traders using complex orders and aim to improve how prices are set and how errors are handled, with immediate effect starting September 4, 2025. This means faster, clearer trades and potentially better prices for investors.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Complex PIM Must Give Price Improvement
If you trade complex option orders, an Agency Complex PIM order must execute at least one minimum price variation better than a resting Complex Order's limit price. The minimum price variation for complex strategies is $0.01, and this PIM amendment was filed on September 4, 2025 and will be implemented on or before December 20, 2026.
Early Termination Trigger Clarified
If a non-marketable Complex Order on the same side would cause a Complex PIM execution to be at or outside the best bid or offer, the exchange may end the PIM exposure early. This change was filed September 4, 2025 and aligns the early-termination text with the new PIM price-improvement rule.
Only Conforming Complex Ratios Accepted
The Exchange will only accept Complex Orders with a 'conforming ratio' where the options components' ratio is between 0.333 (one-to-three) and 3.00 (three-to-one). If one component is the underlying security, the ratio between any options component and the underlying must be no greater than 8 option contracts to 100 shares. This change was filed September 4, 2025 and other amendments are effective 30 days after filing.
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