Cboe BZX files tweak to market maker two-sided quote differentials rule
Published Date: 9/1/2026
Notice
Summary
No summary available.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 2 costs, 0 mixed.
Market Makers limited to $5 quote width
The Exchange proposes that a Market Maker's two-sided electronic quote may not be wider than $5 between bid and offer. The $5 maximum is measured across the Market Maker firm (aggregating all EFIDs) and applies to quoted series or classes unless the Exchange sets a different differential.
Exchange can set series-specific spread limits
The Exchange may establish bid/ask differentials other than the $5 general maximum for one or more option series or classes and will announce any such differentials via Exchange Notice. The filing notes other exchanges have set series-specific differentials (for example, Phlx had intraday differentials ranging from $20 to $800 for NDX options in a cited alert).
Firm-level aggregation of Market Maker quotes
The Exchange will measure a Market Maker's compliance with the bid/ask differential at the Options Member firm level by aggregating quotes across all Executing Firm IDs (EFIDs). For example, if EFID A quotes $0 bid / $10 offer and EFID B quotes $5 bid / $15 offer, the firm aggregate is $5 bid / $10 offer, which meets a $5 differential requirement.
No-bid treated as $0 for width calculation
The Exchange clarifies that a bid of zero or no bid is treated as a $0 bid for calculating the bid/ask differential. Using the example from the filing, a lone $10 offer with no bid is a $10 width unless aggregated with other EFID quotes at the firm level.
Wider option spreads when underlying NBBO is wide
The proposed rule exempts in-the-money option series from the $5 differential when the national best bid and offer (NBBO) for the underlying security is wider than the applicable differential; in such cases the option spread may be as wide as the underlying NBBO. The Exchange says this avoids requiring options to be quoted tighter than the underlying security.
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Previous / Next Documents
Previous: 2026-17802, Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 22.6 (Market Maker Quotations) To Adopt Two-Sided Quote Bid/Ask Differentials
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.
Next: 2026-17804, Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 5.52 (Market-Maker Quotes) To Adopt Two-Sided Quote Bid/Ask Differentials
Cboe C2 Exchange is updating its rules to set clear limits on how wide market-makers can set their bid and ask prices. This change affects market-makers by helping keep prices fair and competitive, starting immediately. It’s a smart move to make trading smoother and more transparent, with no extra costs for traders.