Cboe EDGX Adds Safeguard Against Wild Stock Price Swings
Published Date: 4/24/2026
Notice
Summary
Cboe EDGX Exchange is updating its rules to add a new safety feature that stops trades from happening at crazy high or low prices when the best available prices in the market are very far apart. This change helps protect traders and investors from losing money due to wild price swings. The new rule started right away on April 10, 2026, so everyone trading on EDGX should be aware and ready.
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Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
New Wide Market Pause to Curb Wild Trades
The EDGX exchange adopted a new wide market protection (Rule 21.17(a)(8)) that pauses certain near-marketable market or limit orders and elected Stop or Stop-Limit orders when the National Best Bid and Offer (NBBO) is determined to be “wide.” Paused orders are displayed at a Benchmark Price and then proceed through an iterative drill-through process (each iteration is an Exchange-determined period that may not exceed three seconds) to reduce the risk of executions at extreme or adverse prices. The rule became effective April 10, 2026.
Market Orders in No-Bid/No-Offer May Get Drill-Through
EDGX amended its no-bid/no-offer market order protections so certain market orders that previously would have been canceled when the NBB or NBO was zero may instead enter the EDGX Book at the Benchmark Price and begin the drill-through process. For example, under current rules a sell market order with an NBB of zero and NBO greater than $0.50 would be canceled; under the amendment, if that order is subject to wide market protection it will be displayed at the Benchmark Price for the initial drill-through iteration with any remaining size continuing through the drill-through process.
How the Pause Price Is Set and When It Runs
When the NBBO is "wide" (as determined by EDGX on a class-by-class basis), the rule sets a Benchmark Price for the paused order as the least aggressive of: (1) the NBB/NBO plus a buffer amount (Exchange-determined, class/premium basis), (2) the last trade price if it is no worse than the NBB/NBO, or (3) the midpoint of the current NBBO. The protection applies during all trading sessions except for a pre-determined time before the close of Regular Trading Hours and excludes bulk messages, Intermarket Sweep Orders (ISOs), Immediate-or-Cancel orders (IOCs), and M and N capacity orders.
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