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Friday, September 26, 2014

Options Regulatory Alert #2014 - 35
PHLX Modifies Guidelines of Granting Opening Quote Parameter Relief

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  • Regulatory

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PHLX Options Exchange Officials (OEOs) may grant opening quote relief from the opening quote spread requirements for both individual option classes as well as floor-wide relief for all option classes based upon specific criteria. PHLX Specialists may request opening quote spread parameter relief by submitting their requests through the PHLX Market Conditions Exemption online form prior to 9:15 a.m. (ET) on any individual trading day. OEOs will review each request to determine if such relief is warranted based on specific criteria. If warranted, OEOs will determine whether the opening quote spread parameter relief will be double the new preset opening quote spread widths.

For non-Specialist requests (i.e.: Streaming Quote Traders (SQTs) and Remote Streaming Quote Traders (RSQTs), OEOs will review the request to determine if such relief is warranted. If the OEOs determine that relief is warranted, they will notify the assigned Specialist of the request and make any final assessments prior to approval. Once the Specialist receives OEO approval, the opening relief will be granted for all SQTs and RSQTs.

OEOs may grant 2x wide the opening quote spread parameter relief when one of more of the following conditions exist for an underlying security:

  • Previous day's close $20 and above, and has moved at least $5.00
  • Previous day's close $50 and above, and has moved at least $10.00
  • Previous day's close $100 and above, and has moved at least $20.00
  • Pending corporate actions with undisclosed or uncertain terms
  • Company or industry news with anticipated significant market impact
  • Government news of a sensational nature

OEOs will review each request separately and consider all of the factors associated with the aforementioned criterion. Requests to exceed 2x wide opening quote spread parameter relief will be determined on a case by case basis.

OEOs will grant floor-wide double-wide opening quote spread relief by 9:20 a.m. (ET) when the Standard and Poor’s Futures (S&P) indicate an opening of up or down greater than 2.25%.
 
 
 
 
 
 
 
 

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