Cboe EDGX tightens market maker bid-ask differentials for fairer trading
Published Date: 9/1/2026
Notice
Summary
Cboe EDGX Exchange is updating its rules to set clear limits on how wide market makers can set their bid and ask prices. This change helps keep trading fair and orderly for everyone involved, especially market makers and traders. The new rule kicks in right away, aiming to improve market quality without extra costs.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 1 costs, 2 mixed.
Caps Market-Maker Quote Width at $5
Market Makers on the EDGX Options exchange may not set an electronic bid and offer more than $5 apart in any option series; the Exchange proposes a $5 maximum permissible width between a Market Maker's bid and offer.
Tighter Quotes Aim to Help Investors
The Exchange says the $5 maximum bid/ask differential will cause Market Makers to submit tighter quotes, which the Exchange expects will improve market quality and increase price-discovery and execution opportunities for investors and traders.
Exchange Can Set Wider/Narrower Differentials
The Exchange may establish bid/ask differentials other than $5 for one or more option series or classes and will announce any such differentials to members via Exchange Notice.
Exception When Underlying NBBO Is Wider
For in-the-money option series where the national best bid and offer (NBBO) in the underlying security is wider than the Exchange's bid/ask differential, the option's differential may be as wide as the NBBO spread in the underlying security.
Firm-Level Aggregation for Compliance
The Exchange will measure compliance with the bid/ask differential at the Options Member firm level by aggregating all quotes across an issuer's Executing Firm IDs (EFIDs) in a series, so a firm's combined quoting across EFIDs determines compliance.
No-Bid Treated As $0 for Width Calculations
The Exchange clarifies that a bid of zero or 'no bid' counts as a $0 bid for the two-sided market and bid/ask differential calculations; for example, a lone offer with no bid is treated as a $0 bid when measuring width.
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