Market Model

Features and Functionality

 

Low Access and Operating Costs

BOX Participants are not obliged to acquire equity in BOX or to lease trading rights from an equity holder; this is the reason they are called BOX Participants rather than “members”. BOX offers competitive pricing for all of its Participants.
Exchange fees are detailed in Fees.


Fully Automated with Straight-Through Processing

The BOX trading system is entirely automated, providing the economies of straight-through processing that maximizes liquidity, encourages price competition and rapidly executes orders of all sizes. The BOX trading system operates on a state of the art, high performance and low-latency SOLA trading platform.


Competing Market Makers

Market Makers are BOX Participants who have applied as a Market Maker on BOX and have been allocated one or more market making appointments by BOX (i.e., assigned the rights and responsibilities for making markets on one or more option classes).

There are no designated Specialists; rather, competing Market Makers are responsible for ensuring basic liquidity. The general obligations and responsibilities of BOX Market Makers are explained in greater detail in Become a Market Maker.

A Market Maker can register as a Preferred Market Maker in order to be eligible to receive an allocation preference with respect to a percentage of  an Preferenced Order. In order to be eligible to receive the allocation preference, a Preferred Market Maker must meet certain pre-requisites. A Preferred Market Maker will have heighted continuous quoting obligations compared to a Market Maker.


Price Improvement Period (“PIP”)

The PIP is an innovative automated auction process which provides potential for price improvement and a participation privilege for the PIP initiator. Refer to the Price Improvement Description for details regarding this process.


Block Order Auctions

The Facilitation Auction will allow Order Flow Providers (“OFPs”) to enter crossing transactions where the OFP represents a block-size order as agent and is trading against the Agency order as principal (facilitating the agency order) and/or has solicited an order to take the opposite side of the Agency order.

The Solicitation Auction is a process by which an OFP can attempt to execute orders of 500 or more contracts it represents as agent against contra orders that the OFP has solicited.  The solicitation transactions will be required to be for at least 500 contracts and will be executed only if the price is at or between the NBBO.  Each Agency order entered into the Solicitation auction shall be all-or-none.


Complex Order

BOX has integrated the Complex Order Book and BOX Book in such a manner to create a dynamic, real-time trading mechanism which maximizes the opportunity for trade executions.

Refer to the  Complex Order Description for details regarding this process.


Transparency and Anonymity

BOX broadcasts the five best price limits for each instrument in real-time with complete anonymity to BOX Participants.


Risk Management and Market Protections

BOX Provides the flexibility for all Participants to establish risk parameters specific to each Participant’s risk tolerance. For details on establishing risk parameters, contact the BOX Market Operations Center at boxmoc@boxexchange.com .