Cboe Proposal to Adopt Electronic Position Compression Cross Orders

September 1st | 2020

Cboe recently filed a proposal to adopt Position Compression Cross (“PCC”) orders. Currently, the Exchange facilitates compression forums on the trading floor at the end of each calendar week, month, and quarter in which Trading Permit Holders (“TPHs”) may reduce open positions in series of S&P 500 Index (“SPX”) options in order to mitigate the effects of capital constraints. These orders were historically limited to open out cry but were enabled in electronic form pursuant to Rule 5.24(e)(1)(E) while the Cboe’s floor was closed due to COVID-19. Because electronic PCC orders proved popular and useful, the exchange is seeking to make them available permanently. Cboe’s filing, which is available here, does a great job of detailing how PCC orders work and how they contribute to a healthy SPX market.

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