The Chicago Board Options Exchange, Incorporated (CBOE) is proposing to amend CBOE Rule 6.53C, “Complex Orders on the Hybrid System,” which governs the electronic handling and execution of complex orders by CBOE’s Hybrid System. The proposed amendments would allow for the electronic handling and execution of stock-option orders on CBOE. The stock-option orders consist of an option component and a stock component. With the establishment of the CBOE Stock Exchange (CBSX), CBOE can now handle and trade stock-option orders electronically, with the stock component execution taking place on CBSX.
The main differences between the handling of stock-option orders and other complex order types handled pursuant to CBOE Rule 6.53C are as follows: (i) the stock portion of the stock-option order will be executed on CBSX; (ii) the execution of a stock-option order submitted to the Complex Order Book is slightly different; (iii) the manner in which stock-option orders are executed through the Complex Order Auction; and (iv) the N-second group timer will not be in effect for stock-option orders.