Nasdaq Updates Complex Trading Rules for Fairer Options Deals
Published Date: 9/16/2025
Notice
Summary
Nasdaq MRX is updating its Complex Price Improvement Mechanism (PIM) and other trading rules to make options trading smoother and fairer for everyone involved. These changes affect traders using complex orders and aim to speed up trades while protecting against errors. The new rules took effect right after filing on September 4, 2025, with no direct cost impact but better trading flow expected.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 3 costs, 0 mixed.
Complex PIM must give one-cent improvement
If you use an Agency Complex PIM order, the order must execute at least one minimum price variation better than a resting Complex Order's limit price. The minimum price variation for complex legs is $0.01, and this change is scheduled to be implemented on or before December 20, 2026.
Early termination when execution would be at-or-outside NBBO
The Exchange will allow a Complex PIM auction to early terminate if it receives a non-marketable Complex Order that would cause the Agency Complex Order to execute at or outside the best bid or offer on the Complex Order Book. This change aligns the early-termination trigger with the new price-improvement requirement.
Only 'conforming ratio' complex orders accepted
The Exchange will accept only Complex Orders with a 'conforming ratio,' defined as option-leg size ratios between one-to-three (0.333) and three-to-one (3.00). If one component is the underlying security, the ratio between any options component and the underlying must be no greater than eight contracts to 100 shares.
Auction and crossing orders rejected during halts
During a trading halt, existing auction orders, auction responses, and Crossing Orders are rejected by the MRX System. This rule text clarifies current system behavior and becomes effective 30 days after filing (filed September 4, 2025; effective on or about October 4, 2025).
Cancel market complex orders in limit/straddle states
The Exchange will cancel Complex Orders that are Market Orders residing in the System if the Market Complex Order is about to be executed while the affected underlying is in a Limit or Straddle State. This clarified behavior becomes effective 30 days after filing (on or about October 4, 2025).
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