Cboe Boosts Deals for Stocks Under a Buck—SEC Watching
Published Date: 6/24/2025
Notice
Summary
Cboe BYX Exchange wants to upgrade its Retail Price Improvement (RPI) program by adding a cooler, enhanced RPI order and letting it work for stocks priced under $1. This change could help everyday investors get better prices when buying or selling these cheaper stocks. The SEC is now reviewing the plan and will decide by June 18, 2025, so keep an eye out for updates!
Analyzed Economic Effects
5 provisions identified: 5 benefits, 0 costs, 0 mixed.
New "Enhanced RPI" order for retail trades
You could see a new order type called an Enhanced RPI Order that lets liquidity providers "step up" their price within a defined Step‑Up Range to offer extra price improvement and gain execution priority to trade with incoming retail orders. The Exchange describes this Enhanced RPI Order as non‑displayed, entered at a limit price plus a Step‑Up Range, and able to obtain priority over same‑side resting orders when certain step‑up conditions are met.
Program expands to stocks under $1.00
The Retail Price Improvement (RPI) Program will be expanded to include securities priced below $1.00; the Program was previously limited to trades at prices equal to or above $1.00. The Exchange will announce when the Program is available for all securities and will no longer issue periodic updates listing included securities.
Retail Orders may use Mid‑Point Peg (IOC required)
Retail Orders may be entered as Mid‑Point Peg Orders, and all Retail Orders (including those entered as Mid‑Point Peg Orders) must use an Immediate or Cancel (IOC) time‑in‑force. The Exchange says the Mid‑Point Peg option lets a Retail Order guarantee price improvement at the NBBO midpoint or better.
Minimum increments and improvement thresholds set
The filing sets precise pricing increments and minimum price‑improvement thresholds: for securities priced at or above $1.00, RPI Orders must be at least $0.001 better than the Protected NBB/NBO and may be entered in $0.001 increments; for securities below $1.00, RPI Orders must be at least $0.0001 better and may be entered in $0.0001 increments. The Exchange also states an Enhanced RPI Order is generally expected to provide at least $0.005 of price improvement to gain priority, though the required minimum can vary between $0.001 and $0.01.
RPI interest cannot execute at or worse than NBBO
RPI Interest (both RPI Orders and Enhanced RPI Orders) is ineligible to execute at prices equal to or inferior to the Protected national best bid or national best offer (Protected NBB/NBO); if an RPI Interest is ineligible to execute for that reason it will remain on the BYX Book and become eligible later if the Protected NBBO moves. The Exchange explicitly states RPI Interest may be entered with a limit price equal to or inferior to the Protected NBBO but cannot execute at those prices.
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