The Boston Options Exchange (BOX) plans to shift to maker-taker pricing for options classes outside the US penny-pilot scheme from 3 August, despite once being an opponent of the fee model. The exchange already uses maker-taker pricing for penny-pilot options.
Following the change, BOX will pay a $0.30-per-contract rebate to those who remove liquidity regardless of the type of account a member holds with the exchange, and charge those posting liquidity $0.30 per contract. This is a reverse of the maker-taker pricing schemes typically used for penny-pilot options and equities, which pay liquidity providers and charge takers.
The new pricing will be used in addition to the present fees, where orders executed for public customer accounts of BOX participants are free and all other account types pay a fee of $0.20 per contract.
“BOX has historically been opposed to the practice of ‘payment for order flow’; however, the practice has persisted and it appears it will remain with us for the foreseeable future,” said Will Easley, vice-chairman of BOX, in a statement. “Accordingly, BOX’s competitive response is to modify its transaction fees on the non-penny-pilot classes. We believe it is an improvement on existing payment schemes as it is fully transparent and available for all.”
Rival bourse The Nasdaq Options Market introduced a $0.20 taker rebate for customer orders (as opposed to proprietary or market-maker orders) in non-penny-pilot options on 1 July. The rebate does not apply when trading against other customer orders.
Also in July, equity exchange BATS announced it would be launching a US options exchange in early 2010 that would employ a maker-taker pricing structure.
NYSE Arca Options only uses maker-taker pricing for penny-pilot options. The remainder of the US options exchanges – The Chicago Board Options Exchange, International Securities Exchange, American Stock Exchange (now part of NYSE Euronext) and Philadelphia Stock Exchange (Now part of Nasdaq OMX) – do not use maker-taker pricing.