Difference between revisions of "CBOE Stock Exchange (CBSX)"

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{{Infobox_Company   
 
{{Infobox_Company   
 
| company_name =  CBOE Stock Exchange (CBSX)
 
| company_name =  CBOE Stock Exchange (CBSX)
| company_logo =  [[Image:CBSX.gif]]
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| company_logo =  [[Image:CBSX_Logo.jpg|200px]]
 
| key_people =    [[David Harris]], President & CEO
 
| key_people =    [[David Harris]], President & CEO
 
| foundation =    March 2007
 
| foundation =    March 2007
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| employees =       
 
| employees =       
 
| products =      Fully electronic equities exchange
 
| products =      Fully electronic equities exchange
| homepage=        [http://www.cbsx.com www.cbsx.com]
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| homepage=        [http://www.cbsx.com www.cbsx.com]
 
}}
 
}}
  
In early 2007, the CBOE Stock Exchange (CBSX) was created by the [[Chicago Board Options Exchange]] and four [[market maker]] partners as a fully [[electronic market]] with a strict [[price-time priority]] matching [[algorithm]] and high-[[liquidity]] rebates for dedicated liquidity providers.  
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The CBOE Stock Exchange (CBSX) was created in early 2007 by the [[Chicago Board Options Exchange]] and four [[market maker]] partners as a fully [[electronic market]] with a strict [[price-time priority]] matching [[algorithm]] and high-[[liquidity]] rebates for dedicated liquidity providers.  
  
CBSX operates as a facility of [[Chicago Board Options Exchange]] (CBOE) and uses CBOE's technology platform. CBSX (www.cbsx.com) is owned by CBOE and a consortium of financial entities. The CBSX multi-[[asset]] [[trading]] model was initially designed to increase the efficiency of trading combined [[stock]] and [[options]] [[order]]s, while reducing [[execution]] [[cost]]s for market participants.
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The CBOE shut down CBSX operations in early 2014, saying that the small exchange no longer fit into its business strategy. CBSX accounted for about 0.4% of U.S. equity market trading volume, according to data from [[BATS Global Markets]] quoted in the Wall Street Journal.<ref>{{cite web|url=http://online.wsj.com/news/articles/SB10001424052702304275304579395601716404662|name=CBOE to Shut Stock Trading Venue|org=The Wall Street Journal|date=February 21, 2014}}</ref>
  
With a new strategic initiative, on July 1, 2011, CBSX moved its trading operations to the East Coast from Chicago and began trading from the Equinix NY4 Internet Business Exchange datacenter in Secaucus, NJ. CBSX's move to the NY4 facility was intended to increase execution speed for the majority of CBSX's customers, which are located on the East Coast.  
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CBSX operated as a facility of [[Chicago Board Options Exchange]] (CBOE) and used CBOE's technology platform, [[CBOE Command]]. CBSX was owned by CBOE and a consortium of financial entities. The CBSX multi-[[asset]] [[trading]] model was originally designed to increase the efficiency of trading combined [[stock]] and [[options]] [[order]]s, while reducing execution costs for market participants. In July 2011, CBSX launched a new strategic initiative to increase execution speed for the majority of CBSX's customers, who are located on the East Coast. CBSX moved its trading operations from Chicago to New York and began trading from the [[Equinix]] NY4 in New Jersey.
  
As part of that initiative, one month prior to the move to New Jersey, on June 1, 2011, CBSX instituted a simplified pricing model with identical fees for both liquidity "makers" and liquidity "takers" trading on CBSX, making CBSX the only U.S. exchange to use identical pricing for both makers and takers of market liquidity. The new CBSX pricing model is also one of the most economical fees structures currently available in the securities industry. 
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As of January 1, 2014, about 7,200 stocks stocks and ETFs were listed for trading.
 
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In the new CBSX pricing model, the fee for stocks trading above $1.00 is $0.0002 per share, and for stocks below $1.00, the fee is 0.02 percent of the dollar value of the transaction. In standard maker-taker market models, fees are generally different for those who make market liquidity and for those who take liquidity from the market. As of July 2011, about 7,600 stocks were listed.
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== CBSX Market Model ==
 
== CBSX Market Model ==
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On opening day, CBSX launched an initial roster of 12 [[stock]]s, with plans to list 2,800 of the most actively traded [[New York Stock Exchange]], [[NASDAQ]] Stock Market, and [[American Stock Exchange]] listed securities, [[exchange traded funds]] ([[ETFs]]), and other listed securities. By the end of the summer in 2007, that goal was achieved, with roughly 2,900 listings on the exchange. (See [CBSX stock listings and rollout schedule http://www.cbsx.com/aboutcbsx/cbsxstockdirectory.aspx])
 
On opening day, CBSX launched an initial roster of 12 [[stock]]s, with plans to list 2,800 of the most actively traded [[New York Stock Exchange]], [[NASDAQ]] Stock Market, and [[American Stock Exchange]] listed securities, [[exchange traded funds]] ([[ETFs]]), and other listed securities. By the end of the summer in 2007, that goal was achieved, with roughly 2,900 listings on the exchange. (See [CBSX stock listings and rollout schedule http://www.cbsx.com/aboutcbsx/cbsxstockdirectory.aspx])
 
On Jan. 8, 2008, CBSX and [[Lime Brokerage]], a NY-based firm, announced that Lime [[acquire]]d a minority interest in the CBOE Stock Exchange, LLC.<ref>{{cite web|name="LIME BROKERAGE TO ACQUIRE MINORITY INTEREST IN CBOE STOCK EXCHANGE, LLC”|url=http://www.cboe.com/AboutCBOE/ShowDocument.aspx?DIR=ACNews&FILE=cboe_cbsx_20080108.doc&CreateDate=08.01.2008|org=CBSX/Lime Brokerage|date=Jan. 8, 2008}}</ref>
 
  
 
On Sept. 29, 2011, CBSX announced its acquirement of the [[National Stock Exchange]], Inc. (NSX). The two exchanges plan to remain separate, only consolidating data systems and business operations.<ref>{{cite web|url=http://ir.cboe.com/releasedetail.cfm?ReleaseID=609643|name=CBOE Stock Exchange to Acquire National Stock Exchange|org=CBSX|date=September 29, 2011}}</ref>
 
On Sept. 29, 2011, CBSX announced its acquirement of the [[National Stock Exchange]], Inc. (NSX). The two exchanges plan to remain separate, only consolidating data systems and business operations.<ref>{{cite web|url=http://ir.cboe.com/releasedetail.cfm?ReleaseID=609643|name=CBOE Stock Exchange to Acquire National Stock Exchange|org=CBSX|date=September 29, 2011}}</ref>
  
On Jan. 5, 2012, the [[U.S. Securities and Exchange Commission]] (SEC) approved the planned CBSX buyout of NSX.<ref>{{cite web|url=http://online.wsj.com/article/SB10001424052970203513604577143012423866448.html|name=SEC Blesses CBOE Stock Exchange Deal|org=WSJ|date=January 5, 2012}}</ref>
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On Jan. 5, 2012, the [[U.S. Securities and Exchange Commission]] (SEC) approved the CBSX buyout of NSX.<ref>{{cite web|url=http://online.wsj.com/article/SB10001424052970203513604577143012423866448.html|name=SEC Blesses CBOE Stock Exchange Deal|org=WSJ|date=January 5, 2012}}</ref>
  
 
== Volume at CBSX ==
 
== Volume at CBSX ==
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 +
'''2012:''' Average daily volume of 23.77 million shares
 +
 +
'''2011:''' Average daily volume of 10.16 million shares
 +
 
'''2010:''' 5.7 billion shares were traded in 2010, up 43 percent from 2009's annual volume.<ref>{{cite web|url=http://www.cboe.com/AboutCBOE/AnnualReport2010/cboe-stock-exchange.html|name=2010 Annual Report|org=CBOE Holdings Inc.|date=September 29, 2011}}</ref>
 
'''2010:''' 5.7 billion shares were traded in 2010, up 43 percent from 2009's annual volume.<ref>{{cite web|url=http://www.cboe.com/AboutCBOE/AnnualReport2010/cboe-stock-exchange.html|name=2010 Annual Report|org=CBOE Holdings Inc.|date=September 29, 2011}}</ref>
  
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'''2008:''' First full year of trading: CBSX posted more than three billion shares traded at the exchange during 2008, its first full year of trading. The 3,604,649,431 shares traded during 2008 was an increase of 236 percent over the 1,072,401,400 shares traded during the exchange's first 10 months of operation in 2007. Monthly trading volume in 2008 posted year-over-year gains versus each month of 2007. CBSX achieved record monthly volume of nearly 500 million shares in October 2008. Average daily volume during 2008 was 14.4 million shares per day, compared to the 4.3 shares per day in 2007. <ref>{{cite web|url=http://ir.cboe.com/releasedetail.cfm?ReleaseID=493470|name=CBOE STOCK EXCHANGE (CBSX) VOLUME TOPS 3 BILLION SHARES TRADED DURING 2008 Growth in Volume, Listings and Participation|org=CBSX |date=January 15, 2009}}</ref>
 
'''2008:''' First full year of trading: CBSX posted more than three billion shares traded at the exchange during 2008, its first full year of trading. The 3,604,649,431 shares traded during 2008 was an increase of 236 percent over the 1,072,401,400 shares traded during the exchange's first 10 months of operation in 2007. Monthly trading volume in 2008 posted year-over-year gains versus each month of 2007. CBSX achieved record monthly volume of nearly 500 million shares in October 2008. Average daily volume during 2008 was 14.4 million shares per day, compared to the 4.3 shares per day in 2007. <ref>{{cite web|url=http://ir.cboe.com/releasedetail.cfm?ReleaseID=493470|name=CBOE STOCK EXCHANGE (CBSX) VOLUME TOPS 3 BILLION SHARES TRADED DURING 2008 Growth in Volume, Listings and Participation|org=CBSX |date=January 15, 2009}}</ref>
 
== Trade Engine ==
 
CBSX uses the [[CBOEdirect]] trade engine, the same platform that underlies electronic trading on CBOE and the [[CBOE Futures Exchange]] (CFE).
 
 
== Listings and Updates ==
 
CBSX lists staff who can answer questions on the Exchange [http://www.cbsx.com/aboutcbsx/contacts.aspx], as well as "Trader News e-mails" to update participants on new listings, and information regarding enhancements. [http://www.cboe.com/publish/cbsxfeeschedule/cbsxfeeschedule.pdf] (PDF).
 
  
 
== Trading Hours ==
 
== Trading Hours ==
As of September 29, 2011, CBSX trading hours are 7:30 a.m. to 3:45 p.m. (CT)
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CBSX trading hours are 7:30 a.m. to 3:45 p.m. (CT)
  
 
== Key People ==
 
== Key People ==

Latest revision as of 19:18, 18 December 2019

CBOE Stock Exchange (CBSX)
CBSX Logo.jpg
Founded March 2007
Headquarters Chicago
Key People David Harris, President & CEO
Products Fully electronic equities exchange
Website www.cbsx.com

The CBOE Stock Exchange (CBSX) was created in early 2007 by the Chicago Board Options Exchange and four market maker partners as a fully electronic market with a strict price-time priority matching algorithm and high-liquidity rebates for dedicated liquidity providers.

The CBOE shut down CBSX operations in early 2014, saying that the small exchange no longer fit into its business strategy. CBSX accounted for about 0.4% of U.S. equity market trading volume, according to data from BATS Global Markets quoted in the Wall Street Journal.[1]

CBSX operated as a facility of Chicago Board Options Exchange (CBOE) and used CBOE's technology platform, CBOE Command. CBSX was owned by CBOE and a consortium of financial entities. The CBSX multi-asset trading model was originally designed to increase the efficiency of trading combined stock and options orders, while reducing execution costs for market participants. In July 2011, CBSX launched a new strategic initiative to increase execution speed for the majority of CBSX's customers, who are located on the East Coast. CBSX moved its trading operations from Chicago to New York and began trading from the Equinix NY4 in New Jersey.

As of January 1, 2014, about 7,200 stocks stocks and ETFs were listed for trading.

CBSX Market Model

  • Reg-NMS Compliant[2]

---Automated Trading Center with protected quotes
---Automatic sweep functionality to ensure NBBO executions
---Fully electronic order entry and immediate execution

  • Matching Algorithm

---Strict Price-Time
---Anonymous
---Level playing field

  • Liquidity Providers

---Assigned Designated Primary Market Makers (DPMs)in each stock
---Remote Market Maker (RMM) program allows liquidity providers to participate remotely

  • Maker-Taker Pricing Structure

---Rich rebate program

  • Trade Engine

---CBOEdirect

--Each security traded on CBSX has an assigned designated primary market maker (DPM) obligated to quote continuous, two-sided markets. Unlike traditional specialist roles, CBSX DPMs do not act as agents on behalf of orders. In addition, CBSX offers a Remote Market Maker (RMM) program, allowing approved applicants to participate remotely, adding to the liquidity pool. CBSX DPMs include: Equitec Specialists, LLC, LaBranche Structured Products, LLC, Susquehanna Investment Group, Timber Hill/Interactive Brokers Group, VDM Structured Products, LLC, and Wolverine Trading LLC.

History

On March 5, 2007, CBSX was created by CBOE in partnership with four liquidity-providing firms: Interactive Brokers Group, LLC; LaBranche & Co Inc.; Susquehanna International Group, LLP; and VDM Specialists, LLC. All are dominant NYSE specialists. CBSX established a nine-person board, with members of these firms serving as part of the board constituency.

On opening day, CBSX launched an initial roster of 12 stocks, with plans to list 2,800 of the most actively traded New York Stock Exchange, NASDAQ Stock Market, and American Stock Exchange listed securities, exchange traded funds (ETFs), and other listed securities. By the end of the summer in 2007, that goal was achieved, with roughly 2,900 listings on the exchange. (See [CBSX stock listings and rollout schedule http://www.cbsx.com/aboutcbsx/cbsxstockdirectory.aspx])

On Sept. 29, 2011, CBSX announced its acquirement of the National Stock Exchange, Inc. (NSX). The two exchanges plan to remain separate, only consolidating data systems and business operations.[3]

On Jan. 5, 2012, the U.S. Securities and Exchange Commission (SEC) approved the CBSX buyout of NSX.[4]

Volume at CBSX

2012: Average daily volume of 23.77 million shares

2011: Average daily volume of 10.16 million shares

2010: 5.7 billion shares were traded in 2010, up 43 percent from 2009's annual volume.[5]

2009: More than 3.93 billion shares were traded (ADV of 15.6 million shares), up 9.1 percent from 2008 volume of 3.60 billion shares.

2008: First full year of trading: CBSX posted more than three billion shares traded at the exchange during 2008, its first full year of trading. The 3,604,649,431 shares traded during 2008 was an increase of 236 percent over the 1,072,401,400 shares traded during the exchange's first 10 months of operation in 2007. Monthly trading volume in 2008 posted year-over-year gains versus each month of 2007. CBSX achieved record monthly volume of nearly 500 million shares in October 2008. Average daily volume during 2008 was 14.4 million shares per day, compared to the 4.3 shares per day in 2007. [6]

Trading Hours

CBSX trading hours are 7:30 a.m. to 3:45 p.m. (CT)

Key People

References

  1. CBOE to Shut Stock Trading Venue. The Wall Street Journal.
  2. Market Model. CBOE.
  3. CBOE Stock Exchange to Acquire National Stock Exchange. CBSX.
  4. SEC Blesses CBOE Stock Exchange Deal. WSJ.
  5. 2010 Annual Report. CBOE Holdings Inc..
  6. CBOE STOCK EXCHANGE (CBSX) VOLUME TOPS 3 BILLION SHARES TRADED DURING 2008 Growth in Volume, Listings and Participation. CBSX.