Cboe C2 updates market-maker bid-ask limits to enhance trading fairness
Published Date: 9/1/2026
Notice
Summary
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.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 1 costs, 1 mixed.
Default $5 Max Quote Width
If you trade or hold options, the Exchange is limiting how wide a market-maker can set its bid and ask to $5 in any series. The $5 maximum applies to a Market-Maker's aggregate firm quote across all executing firm IDs and is effective following the filing on August 17, 2026.
Exchange Can Set Wider Differentials
The Exchange may set bid/ask differentials other than the $5 maximum for one or more specific option series or classes. The Exchange will announce any such differentials to members when it chooses to apply them.
ITM Options Follow Underlying NBBO Width
For in-the-money option series, the bid/ask differential cap does not apply when the national best bid and offer (NBBO) in the underlying security is wider; in those cases the option spread may be as wide as the underlying's NBBO. This exception is part of the rule change filed on August 17, 2026.
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Key Dates
Department and Agencies
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Previous / Next Documents
Previous: 2026-17803, Self-Regulatory Organizations; Cboe BZX 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
Next: 2026-17805, Self-Regulatory Organizations; Cboe 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