Cboe Tweaks Auction Rules for Smoother Trading Flow
Published Date: 5/14/2026
Notice
Summary
Cboe BYX Exchange is updating its trading rules to give traders more control with a new optional instruction for special auction-only orders and a new 'Auction or Cancel' time limit. These changes help orders work smoother during periodic auctions, making trading faster and more flexible. Traders using BYX will see these updates soon, with no extra costs but better order handling.
Analyzed Economic Effects
6 provisions identified: 4 benefits, 1 costs, 1 mixed.
Scoring, Priority, and Lock‑Out Controls
BYX will score Users (at the MPID level and per symbol, calculated daily) using three components—confirmation response rate, confirmation response size, and confirmation response price—to determine (1) which Users get confirmation requests first when multiple contingent orders match and (2) whether a User is prohibited from submitting additional orders containing a Contingent Instruction. A minimum of 10 confirmation requests in a symbol is required before a score is assigned (MPIDs start at 100% until they reach 10 requests); scoring bands, component weightings, and any lock‑out thresholds will be published on the Exchange website and changes communicated at least 30 days in advance by Trade Desk Notice.
New Contingent Instruction for PAOCs
If you trade on Cboe BYX, you can add a new “Contingent Instruction” to a Periodic Auction Only Order (a PAOC). A PAOC with a Contingent Instruction is non‑binding on entry and only becomes binding after (1) it matches with contra‑side liquidity and (2) you confirm your intent to trade by sending a Confirmation Order; the System cancels the original PAOC when it sends the confirmation request. A Contingent Instruction may not be appended to a Periodic Auction Eligible Order or a Continuous Book Order, and a PAOC with a Contingent Instruction cannot join a Periodic Auction that has already begun when the order is received.
New Auction-or-Cancel Time‑in‑Force
BYX will add a new time‑in‑force called Auction‑or‑Cancel (AOC) for Periodic Auction Only Orders. An AOC order is executed in whole or in part at the end of the Periodic Auction Period immediately following receipt, may join an auction already in progress when received, is not routable to other trading centers, and any portion not executed in the auction is cancelled and not posted to the Continuous Book. A Periodic Auction Only Order that contains both a Contingent Instruction and AOC is not permitted to join an auction already in progress.
Periodic Auction Timing Changed
BYX will change the Periodic Auction Period from a fixed 100 milliseconds to a minimum fixed 70 milliseconds plus a random 0–30 milliseconds, so each Periodic Auction Period lasts between 70 ms and 100 ms. The Exchange also allows immediate subsequent Periodic Auctions that run for a fixed 70 milliseconds each, with no limit on the number of Subsequent Auctions.
Faster Auction Messages and New Indicators
When a Periodic Auction is initiated, BYX will send the initial Periodic Auction Message immediately upon initiation (instead of at a randomized time) and will continue disseminating updates every 5 milliseconds for the remainder of the auction. If one or both sides initiating the auction include a Contingent Instruction, the message will indicate that at least one order contains a Contingent Instruction and will include the matched quantity executable at the Periodic Auction Book Price for any contingent orders where a confirmation request was sent.
PAOC Priority Based on Confirmation Receipt
For PAOCs (Periodic Auction Only Orders containing a Contingent Instruction), the Exchange will base size/time priority on the receipt time of the Confirmation Order rather than on the original receipt time of the PAOC. The PAOC is automatically cancelled when the System‑generated confirmation request is sent and a placeholder is kept while awaiting the Confirmation Order.
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