Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend FLEX Rules
Published Date: 2/2/2026
Notice
Summary
Nasdaq ISE is upgrading its FLEX options trading to make things smoother and more flexible. Traders can now price orders as percentages, use a new Delta-Adjusted at Close option, and mix FLEX and regular options in complex orders. These changes kick in right away, helping traders save time and possibly money with smarter, faster trades.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
FLEX Options Can Use Percentage Prices
You can now enter FLEX option exercise prices, bids, and offers as a percentage of the underlying security or index instead of only as a dollar amount. Percentage increments may be no smaller than 0.01%, and after applying the percentage to the closing underlying value the System rounds the dollar transaction price to the nearest fixed minimum increment (for example, nearest $0.01).
Delta-Adjusted-at-Close (DAC) Orders Adopted
The Exchange adopted a Delta-Adjusted-at-Close (DAC) order instruction that adjusts a FLEX order's execution price at the market close using the formula P2 = P1 + (U - R) * D, where P1 is the original execution price, R is the reference price, U is the closing price, and D is the delta. Members must designate a delta (per leg for complex orders) and may designate a reference price; deltas may be entered to four decimals and DAC orders execute only in FLEX electronic auctions, FLEX PIM, or FLEX SOM auctions.
Complex FLEX Orders May Mix FLEX and Non-FLEX Legs
The Exchange adopted rules permitting the legs of a complex FLEX order to include a mix of FLEX Option series and non-FLEX Option series (a 'FLEX v. Non-FLEX Order'), allowing Members to combine FLEX and non-FLEX legs in a single complex order. The same-format requirement applies: exercise price, bids/offers and minimum increments must be in the same format (dollars or percentage) as the exercise price of each FLEX series.
DAC Use Limits: Timing and Format Restrictions
DAC instructions may only be applied to FLEX Option series whose exercise price is expressed as a fixed dollar price (DAC cannot be used for series with exercise prices expressed as a percentage). For simple DAC orders in single-stock equity options, the order may not be submitted earlier than 45 minutes before market close and may not be submitted on the option's expiration day. DAC orders execute only in FLEX electronic auctions, FLEX PIM, or FLEX SOM auctions.
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