NYSE American Loosens ETF Options Rules for Smoother Cashouts
Published Date: 10/2/2026
Notice
Summary
NYSE American is updating its rules for FLEX options on ETFs, letting bigger and busier ETFs qualify for cash settlement. This change affects traders using FLEX equity options and kicks in right away, aiming to keep things smooth if an ETF stops trading or changes. No new fees are mentioned, but the new rules set clear steps to handle these options better.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Faster cash-settlement eligibility for new ETFs
If an ETF newly becomes FLEX-eligible, the Exchange can allow cash settlement based on the prior one-month trading period if the ETF hits a $600,000,000 average daily notional value and a 5,616,000-share average daily volume. Previously, ETFs were considered only at the Exchange's bi-annual reviews (January 1 and July 1) using six months of data and thresholds of $500,000,000 notional and 4,680,000 shares ADV.
Tiered wind-down rules for ETFs losing eligibility
If an ETF no longer meets the eligibility criteria at a bi-annual review, the Exchange will apply tiered rules: if there was no open interest in cash-settled FLEX ETF options during the prior six months, new positions must be physically settled and open cash-settled positions may only be traded to close. If there was open interest during the prior six months, new cash-settled positions are allowed for one year from the bi-annual review date, after which new positions must be physically settled and remaining cash-settled positions may be traded only to close; if the ETF regains eligibility at either bi-annual review during that year the ETF resumes full cash-settlement eligibility.
Removal of 50-ETF cap for cash settlement
The Exchange removed the rule that limited cash settlement as a contract term to no more than 50 underlying ETFs. As noted in the filing, the cap had become binding (60 ETFs were eligible as of February 1, 2026), and eliminating it lets any ETF that meets the eligibility criteria be eligible for cash-settled FLEX options.
Rule change effective immediately upon filing
The SEC waived the usual 30-day delay and designated the proposed rule change operative upon filing, making the amendments effective on September 16, 2026. This means the new one-month lookback, tiered wind-down rules, and the removal of the 50-ETF cap are in force immediately.
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