Cboe EDGX Implements Safeguards Against Extreme Trade Prices
Published Date: 4/24/2026
Notice
Summary
Cboe EDGX Exchange is updating its rules to protect traders from getting stuck with really bad prices when the market’s best bid and offer prices are far apart. This new wide market protection kicks in right away to help keep trades fair and reduce risky surprises. Traders and investors using EDGX will see safer order executions starting now, with no extra costs involved.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
New Wide-Market Price Protection
EDGX adopted a new “wide market” protection (Rule 21.17(a)(8)) that pauses certain market, limit, Stop (Stop-Loss), and Stop-Limit orders when the National Best Bid and Offer (NBBO) is determined to be wide and then uses an iterative drill-through process to seek executions at less extreme prices. The rule leverages the existing Drill-Through Price protection, uses an Exchange-determined class-by-class NBBO width and buffer amounts, and limits each drill-through time period to an Exchange-determined length that may not exceed three seconds.
No-Bid/No-Offer Market Order Handling Changed
The Exchange will alter handling of market orders in no-bid or no-offer series: where previously certain market orders would be canceled or rejected (for example, sell market orders with an NBB of zero and NBO > $0.50), if those orders qualify for wide market protection they will instead enter the EDGX Book, be displayed at the Benchmark Price for an Exchange-determined time as the first drill-through iteration, and any remaining size will continue in the iterative drill-through process.
Certain Orders Excluded From Protection
The Exchange will exclude bulk messages, Intermarket Sweep Orders (ISOs), Immediate-or-Cancel orders (IOCs), and all M and N capacity orders from the wide market protection mechanism, so those order types will not be paused or iteratively drilled-through under Rule 21.17(a)(8).
Protection Off Just Before Market Close
The wide market protection will apply during all trading sessions except for a pre-determined amount of time before the close of Regular Trading Hours (Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern Time). During that pre-close period the wide-market drill-through pause will not initiate, allowing a final opportunity to use Stop and Stop-Limit orders to exit positions before overnight trading.
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Key Dates
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