Extended Trading of Multi-Listed Equity Options
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This law enables the Cboe Exchange to conduct extended trading sessions for multi-listed equity options during Global Trading Hours and Curb Trading Hours. It establishes specific hours for these sessions, allowing trades from 7:30 a.m. to 9:25 a.m. and from 4:00 p.m. to 4:15 p.m. Moreover, the proposal introduces eligibility criteria for equity options to participate in these extended trading sessions based on trading volume and market capitalization. The decision responds to investor demand for greater flexibility in trading options alongside the underlying equities during more accessible hours. By permitting trading in the late afternoon and early morning, the Exchange aims to align options trading with the existing trading hours of equities and meet the needs of domestic and international investors who wish to hedge their positions or implement strategies despite regular trading hours restrictions.
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Key Changes
- Introduction of extended trading sessions for equity options during Global Trading Hours and Curb Trading Hours.
- Establishment of specific trading hours: 7:30 a.m. to 9:25 a.m. and 4:00 p.m. to 4:15 p.m.
- Eligibility criteria based on trading volume and market capitalization for options included in these extended hours.
Obligations
What this law requires
Cboe Exchange must amend Rule 5.1 (Trading Days and Hours) to establish Global Trading Hours (GTH) session for designated multi-listed equity options from 7:30 a.m. ET to 9:25 a.m. ET
Cboe Exchange must establish Curb Trading Hours session for designated multi-listed equity options from 4:00 p.m. to 4:15 p.m., or as otherwise permitted as an extended trading session on another exchange
Cboe Exchange must implement a semiannual review process to determine equity options eligibility and designation for GTH and Curb trading sessions
Cboe Exchange must establish and document selection and removal processes for equity options eligible for extended trading hours sessions
Cboe Exchange must define series listing eligibility criteria in GTH and Curb for equity options that meet certain eligibility criteria based on trading volume and market capitalization