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U.S. Options

Nasdaq ISE Complex Orders

Trade smarter and more efficiently with ISE’s innovative technology enabling market participants multi-legged strategies for complex, buy-write and delta neutral orders

Nasdaq ISE Complex Orders

Nasdaq ISE (ISE) Complex Order spreads represent innovative technology that enables all market participants to trade smarter by providing efficient and liquid markets for multi-legged strategies. This fully electronic order book was launched in 2003 and now offers immediate spread execution in over 3,000 products.

ISE provides additional venues for sourcing liquidity for the equity leg of Stock-Option Orders and QCC with Stock Orders including buy-writes and delta neutrals.

ISE Complex Order spreads offers:

Options OnlyTied to Stock
Interaction with ISE Complex and Regular Order BooksInteraction with ISE Complex Book
Exposure Auction OrdersExposure Auction Orders
Facilitation OrdersFacilitation Orders
Solicitation OrdersSolicitation Orders
PIM OrdersPIM Orders
Customer-to-Customer CrossCustomer-to-Customer Cross
Qualified Contingent CrossQualified Contingent Cross with Stock

Advantages

  • Automatic Execution
  • Access to the ISE Complex Order Book spreads
  • Legging into the regular order book (options-only strategies) without leg-in risk
  • Implied Orders enable additional interaction with the regular order book
  • Execution of equity legs of Stock-Option Orders via Cowen (formerly Convergex)
  • Execution of equity legs of QCC With Stock orders at multiple venues

ISE Complex Order Features

  • Price/time allocation
  • Up to 10 legs, including stock
  • Max ratio for options legs 3:1
  • Max options-to-stock ratio 8:1
  • Orders and executions in pennies
  • Market and Limit Orders
  • IOC, FOK, Day, GTC, GTD, Opening Only Orders
  • Reserve Orders
  • Preferenced Orders
  • Attributable Orders
  • Spread Auctions
  • Post trade allocation, including stock leg PTA/give-up
  • Stock-Option Orders available for all equity symbols
  • Combo market data feeds

Price Protections

Do Not Trade Through (DNTT) Functionality

DNTT orders will not trade through away market prices on any leg. DNTT orders trade at or better than NBBO on each leg (both option and stock legs). Orders not marked as DNTT will continue to be eligible to trade through away market prices (up to $0.05 on each leg).

DNTT orders:

  • Are allowed for options-only Complex Orders and Stock-Option Orders, including exposure (Complex Auction Orders)
  • May be Limit Orders or Market Orders, any time validity, and any client category
  • May be modified, including changing DNTT to non-DNTT, and vice versa
  • Are reflected in top of book market data messages, including total DNTT size and total DNTT market order size
  • Will rest on the complex order book (excluding IOC or FOK orders) until executable

SPREAD PRICE PROTECTIONS
ISE offers price protections for vertical and calendar spreads.
 
 VerticalCalendarButterflyBox
Maximum Spread Price Protection LimitThe difference between the higher strike and the lower strike, with a buffer (lesser of $1.00 or 5.0%).NoneThe difference between the middle strike and the outer strikes.The difference between the two pairs of strike prices.
Minimum Spread Price Protection LimitZeroZero, with a buffer ($-0.02).ZeroZero
Limit Orders*Orders entered with a limit price above the maximum or below the minimum spread protection price will be rejected.Orders entered with a limit price below the minimum spread protection price will be rejected.Orders entered with a limit price above the maximum or below the minimum spread protection price will be rejected.Orders entered with a limit price above the maximum or below the minimum spread protection price will be rejected.
Market Orders*

Market Orders to buy will not execute at a net price greater than the maximum spread protection price.

Market Orders to sell will not execute at a net price below the minimum spread protection price.

Market Orders to sell will not execute at a price below the minimum spread protection price.Market Orders will not execute at a price greater than the maximum or below the minimum spread protection price.Market Orders will not execute at a price greater than the maximum or below the minimum spread protection price.
Example

Buy 1, 20 Aug 24 Call
Sell 1, 25 Aug 24 Call

Will not execute at a
price greater than $5.25.

Buy 1, 20 Aug 24 Call
Sell 1, 20 May 18 Call

Will not execute at a
price below $-0.02.

Buy 1 700 Aug 24 Call
Sell 2 710 Aug 24 Call
Buy 1 720 Aug 24 Call

will not execute at a price greater than $10.00.

Buy 1 6400 Aug 24 Call
Sell 1 6450 Aug 24 Call
Sell 1 6400 Aug 24 Put
Buy 1 6450 Aug 24 Put

will not execute at a price greater than $50.

For a full list of order protections, please see the Risk Management Fact Sheets.

*Sell (Buy) market orders (and limit orders entered at a price within the range) can leg into the simple order book at a price higher (lower) than the maximum (minimum) protection range.


Fees

Execution fees for Complex Orders set forth in ISE’s fee schedule apply to options legs as well as the equity leg of Stock-Option Orders that trade in the complex order book. Additional charges for stock executions are billed on your ISE monthly statement. Rate per share, per side may be found on the ISE Official Fee Schedule.

Additional fees may apply and be billed by the equity venue (e.g., SEC Section 31 fees, NASD Trading Activity fee).


STOCK-TIED ORDER SUBMISSION

ISE supports routing the equity leg of Stock-Option Orders to Cowen, and the equity leg of QCC with stock orders to Cheevers, Libucki, and Fog.

If you are not yet enabled for ISE tied to stock functionality, or if you are enabled but wish to request additional routing destinations, please complete the ISE Stock Routing Authorization Form. The form will require certification that the requesting firm is a member of the venues requested on the form and has submitted the documentation required by each venue. Please contact Membership for more information.

Email the completed form to Nasdaq Membership:
membership@nasdaq.com/Phone: +1 215 496 5322

Once Nasdaq and the requested stock routing venues have reviewed and approved the required documentation, your firm can be enabled for Stock-Option Orders and QCC with Stock Orders. Note that an additional software download is not required for Nasdaq Precise users: Stock-Option and QCC With Stock Orders may be entered into Precise using the With Stock Order ticket.

Contact Us

For additional questions, please contact Market Operations at optionshelpdesk@nasdaq.com or +1 215 496 1571.

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