TRADING VENUES

Options Exchange in Chicago gains approval for open-outcry trading floor

Boston Options Exchange will open trading floor in Chicago after US financial authority approves plans.

By Hayley McDowell hayley.mcdowell@strategic-i.com August 04, 2017 10:32 AM GMT

An options exchange has gained regulatory authority to establish an open-outcry trading floor in Chicago, seemingly reviving the traditional method of floor broking.

The Boston Options Exchange (BOX) is an all-electronic equity options market, partly owned by TMX Group in Canada and other broker-dealers.

BOX market participants include the likes of JP Morgan, Goldman Sachs, Morgan Stanley, Nomura, Deutsche Bank and Citigroup.

The Securities and Exchange Commission (SEC) officially approved the application this week, after BOX first submitted the proposal in November last year.

The exchange was met with resistance from rival market participants who claimed the open-outcry trading floor would increase fragmentation in the options trading market and impact price improvement opportunities. 

However, several modifications were made to its proposed new trading floor in a bid to ease the concerns of the SEC and other exchange operators. 

“The Exchange made modifications to the initial proposal that are designed to remove or reduce the potential impediments to order interaction on the BOX Floor and which are designed to increase opportunities for price improvement,” the SEC’s approval letter said.