NYSE American Tweaks FLEX Options Compliance Rules
Published Date: 7/7/2026
Notice
Summary
NYSE American is updating rules for FLEX Options, which let investors customize their stock and index option contracts. These changes aim to make trading clearer and smoother for everyone involved, with no new fees announced. The new rules could start soon after the SEC reviews and approves them, so traders should keep an eye out!
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
Cash Settlement Allowed for 50 Non‑ETF Stocks
The Exchange proposes to allow cash settlement for up to 50 non-ETF FLEX Equity Options whose underlying stock meets two tests: an average daily notional value of $500,000,000 or more and a national average daily volume of at least 4,680,000 shares measured over the prior six-month period. The Exchange identified 143 non-ETF securities that meet those tests based on trading from July 1, 2025 through December 31, 2025, and listed 50 qualifying symbols effective February 2, 2026.
Same Position Limits for Cash‑Settled FLEX
Cash-settled FLEX non-ETF Equity Options would be subject to the Exchange's existing position limits and exercise limits under Rule 904 and Rule 905, including a 250,000-contract position limit that applies to qualifying underlying securities as of December 31, 2025. Positions in cash-settled FLEX options will be aggregated with physically-settled options on the same underlying.
Exchange Trading Offers OTC Advantages
The Exchange says bringing cash-settled FLEX non-ETF Equity Options onto the exchange could draw contracts away from the OTC market and offer three advantages: greater standardization and liquidity, reduced counterparty credit risk because contracts are cleared and guaranteed by the OCC, and more transparent price discovery. The Exchange also said this could open these contracts to more retail investors.
Eligibility Based on Notional Value
Where more than 50 ETFs or more than 50 non-ETF securities qualify for cash-settled FLEX options, the Exchange would select the 50 securities with the highest average daily notional value instead of the highest average daily share volume. The Exchange said notional value accounts for both price and trading and is the new metric for selecting the top 50.
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