Cboe C2 Adds Wide Market Protection to Trading Rules
Published Date: 4/24/2026
Notice
Summary
Cboe C2 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 order executions. Traders and investors using Cboe C2 will see safer trading starting immediately, with no extra costs involved.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
New Wide Market Protection on Cboe C2
Cboe C2 is adding a “wide market protection” to Rule 5.34 to reduce the risk that orders execute at extreme or adverse prices when the National Best Bid and Offer (NBBO) is determined to be wide. The change leverages the exchange’s iterative drill-through process and applies immediately after the rule filing (filed April 10, 2026).
Broader Order Types Get Drill-Through Protection
The wide market protection will apply to certain inbound market and limit orders and to elected Stop (Stop-Loss) and Stop-Limit orders when the NBBO is determined to be wide, causing those orders to be displayed at a Benchmark Price and enter the iterative drill-through process. The rule lets orders rest and be re-priced in short iterations (the Exchange may set iteration lengths up to three seconds and buffer amounts on a class-by-class basis).
Certain Orders Are Excluded from Protection
The wide market protection expressly excludes bulk messages, Intermarket Sweep Orders (ISOs), Immediate-or-Cancel (IOC) orders, and M and N capacity orders from receiving the wide market protection. The Exchange may also apply the protection on a class-by-class basis.
No-Bid/No-Offer Market Orders May Get More Execution Opportunity
The Exchange amends no-bid/no-offer market order handling so that certain sell market orders when the NBB is zero and NBO > $0.50, and buy market orders when the NBO is zero, can enter the Book and be displayed at the Benchmark Price and participate in the drill-through process instead of being immediately canceled or rejected. This is intended to increase execution opportunities for those orders.
Protection Applies Except Just Before Market Close
The wide market protection applies during all trading sessions except for an Exchange-determined amount of time prior to the close of Regular Trading Hours (RTH). The exception preserves a final period for market participants to use Stop and Stop-Limit orders to exit positions before overnight trading.
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Key Dates
Department and Agencies
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Previous / Next Documents
Previous: 2026-07988 — Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 21.17 To Adopt a Wide Market Protection Mechanism Designed To Reduce the Risk of Orders Executing at Extreme or Adverse Prices When the National Best Bid and Offer (“NBBO”) Is Determined To Be Wide
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.
Next: 2026-07990 — Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 21.17 To Adopt a Wide Market Protection Mechanism Designed To Reduce the Risk of Orders Executing at Extreme or Adverse Prices When the National Best Bid and Offer (“NBBO”) Is Determined To Be Wide
Cboe BZX 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 avoid wild price swings. Traders and investors using BZX will benefit from safer, smarter order executions starting immediately, with no extra costs involved.