Cboe Tweaks Fees for Penny Stocks: Traders Brace for Change
Published Date: 9/30/2025
Notice
Summary
Cboe BZX Exchange is updating its fee schedule to change how it charges for certain stock trades, especially those involving Penny Program securities. These changes affect customers, market makers, and brokers by adjusting fees and volume tiers, aiming to simplify and improve the fee structure. The new fees took effect immediately on September 15, 2025, so traders should check how this impacts their costs.
Analyzed Economic Effects
7 provisions identified: 1 benefits, 5 costs, 1 mixed.
Market-Maker Penny Add Tier Overhaul
The MM Penny Add Volume Tiers were revised: the Exchange eliminated MM Cross-Asset Tier 2, changed tier qualification criteria (examples: Tier 2 ADAV in MM orders >= 0.20% of average OCV; Tier 3 ADAV >= 0.15% and ADRV >= 0.75%; Tier 4 ADAV >= 0.35%; Cross-Asset Add Tier now ADAV >= 0.35% and on BZX Equities ADAV >= 0.40% of average TCV, excluding sub-dollar securities). The Exchange added SPY-specific rebates (SPY rebates: Tier 1 $0.33, Tier 2 $0.36, Tier 3 $0.38, Tier 4 $0.42, Cross-Asset $0.43) and adopted a new Tier 5 (to qualify ADAV in MM orders >= 0.50% of average OCV) with rebates $0.42 (excluding SPY) and $0.45 (SPY). The Exchange also adjusted several non-SPY rebates (examples: Tier 1 $0.31->$0.32, Tier 2 $0.38->$0.35, Tier 3 $0.39->$0.38, Tier 4 $0.43->$0.41, Cross-Asset $0.38->$0.42).
Customer Penny-taker Fee Rises
If you trade as a Customer and remove liquidity in Penny Program securities, the per-contract fee increased from $0.45 to $0.48. This change was filed and became immediately effective on September 15, 2025.
Non-Customer Penny Taker Fee Standardized
The Exchange will append fee code PP (standard transaction fee $0.50 per contract) to all Non-Customer orders (Firm, Broker-Dealer, JBO, Market Maker, Away MM, and Professional) that remove liquidity in Penny Program securities and will delete fee code PD (which currently assessed $0.48 for Firm/BD/JBO). These changes were filed on September 15, 2025.
Customer Penny Add Tier Rebates Cut
The Customer Penny Add Volume Tiers were amended: Tier 2 rebate changes from $0.48 to $0.47, Tier 3 from $0.51 to $0.49, Tier 4 from $0.52 to $0.50, Tier 5 from $0.53 to $0.52, and the Customer Cross-Asset Add Tier from $0.52 to $0.50. The Exchange also changed qualification criteria (examples: Tier 2 now requires ADV >= 1.00% of average OCV or ADAV in Customer orders >= 0.30% of average OCV; Tier 3 ADAV in Customer orders >= 0.20% and ADAV in MM orders >= 0.25%; Tier 4 ADAV in Customer orders >= 1.00%; Tier 5 ADAV in Customer orders >= 1.75%; Cross-Asset requires ADAV in Customer orders >= 0.50% of average OCV and on BZX Equities ADAV >= 0.35% of average TCV, excluding sub-dollar securities).
New Customer Penny Take Discount
The Exchange adopted a Customer Penny Take Volume Tier that offers a reduced fee of $0.46 per contract for Customer orders that remove liquidity and meet ADV >= 1.00% of average OCV. This new tier was adopted in the September 15, 2025 filing.
MM Non-Penny Tier Threshold Raised
The MM Non-Penny Add Volume Tier 1 qualification was tightened: required ADAV in MM orders increases from >= 0.10% to >= 0.20% of average OCV. The Exchange also eliminated MM Non-Penny Add Tier 3 (which had provided a $0.88 rebate).
Multiple Firm/Away/Professional Tiers Removed
The Exchange proposed to eliminate multiple add/take volume tier programs: Firm/BD/JBO Penny Add Volume Tiers (footnote 2), MM/Away MM/Professional Penny Take Volume Tiers (footnote 3), Firm/BD/JBO Non-Penny Add Volume Tiers (footnote 8), Away MM Penny Add Volume Tiers (footnote 10), and Away MM Non-Penny Add Volume Tiers (footnote 11). These deletions remove the associated rebates described in the Fee Schedule.
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