U.S. – Nasdaq Position Limit on ETFs

U.S. – Nasdaq Position Limit on ETFs

On 22 March, Phlx, MIAX proposed rule on position limits for ETFs.

  • MIAX amended rule 307 on position limits, as well as rule 309 exercise limits.
  • PHLX amended section (A) of exchange rule 1001, relating to position limits.

Revisions

  • Increase position, exercise limits in options, on range exchange traded funds.
  • For options on the following ETFs: FXI, EEM, IWM, EFA, EWZ, TLT, QQQ, EWJ.
  • Said trade activity has been adversely impacted by the current position limits.
  • Limits have caused option trading in symbols to move from exchanges to OTC.
  • Are based on outstanding shares and trade volume of underlying stock or ETF.
  • Largest capitalized and most frequently traded had limit of 250,000 contracts.
  • Amendment would double the position and exercise limits, for stated symbols.
  • Such options to no longer be subject to standard position and exercise limits.

Effectiveness

  • SEC approved rule, comment 21 days after publication in the federal register.