Cboe Fines Frenzied Cancellers: Trading Spam Costs Extra
Published Date: 5/20/2025
Notice
Summary
Cboe Exchange is rolling out a new fee for Market Makers who cancel or purge too many SPXW orders during regular trading hours. This fee aims to keep trading fair and smooth by discouraging excessive order cancellations. The change took effect immediately on May 1, 2025, so Market Makers should watch their canceling habits or face extra charges!
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
New SPXW Mass Cancel/Purge Fee
Cboe will charge Market Makers fees if they cancel or purge too many SPXW orders during Regular Trading Hours (9:30 a.m.–4:15 p.m. EST). A fee is calculated each day based on the Market Maker's Total Mass Cancels and Purges and a multiplier equal to (Total Mass Cancels and Purges ÷ daily simple electronic non-auction volume added in SPXW), then assessed at the end of the month. The rule took effect May 1, 2025; the filing gives an example where 150,000,000 cancels and purges with 30,000 adds produced a $10,000 Daily Charge, a 1.50 multiplier, and a $15,000 fee for that day.
Affiliate Activity Is Aggregated
When calculating the SPXW Mass Cancel and Purge Fee, a Market Maker's cancel/purge and add volumes are combined with any Affiliate's volumes; an Affiliate is defined as an entity with at least 75% common ownership as reflected on Form BD, Schedule A. This aggregation can cause a Market Maker and its Affiliates together to trigger the fee.
Daily Activity Reports Provided Free
Cboe will provide Market Makers with daily reports, free of charge, that detail their mass cancel and purge activity (including Affiliates) so firms can monitor behavior and avoid triggering the Fee. These reports are intended to help Market Makers track the metrics the Exchange will use to calculate charges.
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