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Nasdaq ISE

Nasdaq ISE (ISE) launched in 2000 as the first all-electronic options exchange in the United States and became part of the Nasdaq Options suite of exchanges in June 2016. Now operating on the best-in-class INET technology, ISE runs on a pro-rata allocation model and ensures fast and efficient executions for Simple, Complex, and Crossing Orders.

ISE is a modified maker/taker exchange model and offers rebates and fees based on the product, client designation and order category. It also offers a firm and farMM crossing fee cap and rebates for Complex Priority Customer Orders.

Features

  • Full Suite of Auction and Crossing Orders: ISE offers a price improvement mechanism (PIM), facilitation, solicitation, and Qualified Contingent Cross (QCC) order type.
  • Price Improvement: Price improvement on ISE can be accomplished through auctions for crossing orders as well as the Complex Auction Order (CAO) and the pre-linkage Flash auction.
  • Routing Strategies: All orders can be marked with the option of Flash and Route, Flash and Do Not Route (DNR), and do not Flash Do Not Route.
  • Complex Order Book: Innovative technology that enables all market participants to trade smarter by providing efficient and liquid markets for multi-legged strategies (up to 10 legs) including complex, buy-write, and delta neutral orders. Learn more >
  • Implied Orders: Enhances ISE’s industry-leading Complex Order Book by enabling interaction of multi-legged orders with the regular order book. This functionality tightens spreads on ISE’s Simple Order Book, resulting in better executions for multi-legged orders and Simple Orders.
  • Nasdaq Precise: Using Nasdaq Precise, formerly known as PrecISE Trade, traders can access all of ISE’s order types, market data, and the Kill Switch. Nasdaq Precise also allows traders to route orders to all options exchanges via Execution Brokers. Learn more >

Products

ISE offers options trading on more than 3,000 underlying equity, ETF, index, and FX products. Our unique market structure and technology fosters deep and liquid markets with competitive prices.

Risk Management

Comprehensive risk management features are built into ISE’s trading technology and include the following protections.

FeaturesDescription
Market Wide Speed Bump
  • Inactivates quotes and prevents any quotes from being activated.
  • Triggered based on a value, which is defined as the number of curtailment events within a specified time period across the entire market.
  • Value defined by the Market Maker and implemented by Market Operations.
  • Threshold established and calculated for ISE.
  • Quote reactivation and re-entry into the market requires contacting Market Operations.
  • Required for all ISE Market Makers.
Cross Market Wide Speed Bump
  • Inactivates quotes and prevents new or existing quotes from being activated.
  • Triggered based on a value, which is defined as the number of curtailment events within a specified time period across the entire market.
  • Value defined by the Market Maker and implemented by Market Operations.
  • Threshold established and calculated for ISE independently.
  • Quote reactivation and re-entry into the markets requires contacting Market Operations.
  • Optional for all Market Makers.
  • Supplements existing Market Wide Speed Bump feature required for Market Makers on each exchange individually.
Price Limit CheckCore Functionality: Simple or Complex Orders which exceed the BBO by the greater of $1.00 or 1% during the regular market trading state are rejected.
Cancel on Disconnect (FIX and DTI connections)Cancels all open orders on disconnect.
Vertical Spread CheckCore Functionality:
  • Vertical spreads entered with a negative limit price will be rejected.
  • Vertical spreads are prevented from legging in to Simple Order quotes if the net trade would result in a negative price.
Spread Trade Through LimitCore Functionality: A spread will not trade through the NBBO by more than $0.05 per leg of the Complex Order strategy.
Complex Strategy Minimum Price Limit:Core Functionality: A Complex Order strategy with all legs being bought or sold cannot be priced below the aggregate minimum tradable price for each component in the strategy ($0.01). Applicable Complex Order strategies entered below this limit will be rejected.
Kill Switch ( FIX, or DTI connections):Core Functionality: The Kill Switch allows member firms to cancel all open orders and prevent new order submission. This feature provides firms with a powerful risk management tool for immediate control of their order activity. Kill Switch can be targeted to affect an entire member firm, specific trading desks within a member firm or specific sessions within a trading desk.
Execution-Based Order Entry Limits (FIX connections):Core Functionality:
  • Maximum Quantity per Order : Prevents orders that exceed a pre-defined maximum quantity per order from being accepted by the Exchange.
  • Maximum Quantity per Day : Prevents orders that exceed a pre-defined total quantity per trading day from being accepted by the Exchange.
  • Maximum Notional Value per Order : Prevents orders that exceed a pre-defined maximum option notional value per order from being accepted by the Exchange. Market Orders will be rejected for FIX connections with maximum notional value defined.
  • Maximum Notional Value per Day : Prevents orders that exceed a pre-defined total option notional value per trading day from being accepted by the Exchange. Market Orders will be rejected for FIX connections with maximum notional value defined.
  • Restricted Securities (PrecISE) : Prevents orders that are a part of a specified restricted list of securities.
  • Reject Pre-Open Orders (PrecISE) : Prevents orders that are entered before the open of the market.
  • Locate Code Required (PrecISE) : Requires a locate code value to be entered for orders with a short-sale stock component prior to submission to the Exchange.

Connectivity

Through our primary data center, firms can access all eleven of Nasdaq's U.S. Markets via Direct Connection or Co-Location. Nasdaq also offers customers the ability to connect to our markets from key financial data centers outside our Carteret facility through our Point of Presence Service.

Trading Protocols:

If you have questions, contact Nasdaq Subscriber Services or call +1 212 231 5180.


Market Data

For more information on ISE Market Data products and services, please contact Data Sales.


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