Cboe shifts options exchange to electronic trading in contingency measure

After closing its open outcry trading floor in Chicago due to coronavirus, Cboe has shifted to electronic trading with quick approval from the SEC.

Cboe Global Markets has made moves to shift it options exchange to a fully electronic environment, after deciding to shut down its open outcry trading floor due to concerns around the spread of coronavirus.

In a statement, Cboe said it had received regulatory approval to temporarily operate its options exchange through electronic channels until 15 May this year, or until the trading floor becomes operable. The changes could be extended depending on how the situation progresses.

Three modifications will support the transition from electronic and floor trading to all-electronic execution, which aim to replicate trading that takes place on the physical trading floor.

Under the new temporary rules, market makers can be solicited for submitted orders into Cboe’s price auction to replicate liquidity on the trading floor, and will not be subject to continuous quoting while participating in the new environment. Cboe has also gained the ability to push more complex strategies with multiple options in electronic trading.

“The SEC’s work with Cboe in this matter is reflective of the agency’s continued commitment to help market participants respond to operational and other challenges raised by COVID-19, including in connection with the implementation of business continuity measures,” said Brett Redfearn, director of the SEC’s division of trading and markets.

“More generally, the division is monitoring operational shifts necessitated by the implementation of business continuity plans and stands ready to advise and assist exchanges, clearing agencies and other market participants with operational and other matters.”