BOX Exchange

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BOX Options Exchange
Image: 200 pixels
Founded Feb. 6, 2004
Headquarters 101 Arch St, Boston, Massachusetts 02110 with an office in Chicago, Illinois

Image: 200 pixels

Key People Ed Boyle, CEO
Products equity options
LinkedIn Profile

BOX Exchange (BOX), which changed its name from BOX Options Exchange in 2018, is a national market system options exchange regulated by the U.S. Securities and Exchange Commission (SEC). It trades U.S. equity options both electronically and on a trading floor in Chicago. BOX is a subsidiary of BOX Holdings Group LLC, which also owns BOX Options Market LLC, and BOX Digital Markets LLC. BOX Holdings was founded in 2002.[1]

BOX launched trading on Feb. 6, 2004 [2] by Boston Stock Exchange, Inc. (BSE), Montreal Exchange and Interactive Brokers Group LLC as an all-electronic equity derivatives market and an alternative to the existing market models. BOX was the first options market to offer the possibility of price improvement to investors via an electronic auction process known as the "PIP."

BOX has always been a relatively small options exchange. In 2010, according to the Futures Industry Association volume report, BOX ranked as the world's 22nd-largest derivatives exchange by volume.[3] The FIA report notes that the BOX's total volume in 2010 was about 91.75 million contracts. BOX's share of the U.S. options market was 2.26% in 2019 when 112,597,175 options were traded.

BOX provides two types of gateways to its trading engine: a) bi-directional order and quote related gateways and b) outbound feed of market data from the BOX trading engine to the user.[4] BOX provides a FIX interface which allows BOX participants who are already using the FIX protocol for order routing to other options markets to connect to the BOX trading engine with a minimum of effort. The FIX interface provides a subset of the BOX trading engine functions and is therefore better suited to the "non-market maker" category of participants.[5]

BOX Options Exchange received approval from the SEC in August of 2017 to open a trading floor, an unusual step at a time when the vast majority of trades are done on computer screens. BOX launched floor trading later that month in the Chicago Board of Trade Building. The BOX floor is the second options trading floor in Chicago, joining the Chicago Board Options Exchange. [6] The exchange said having open outcry would enable customers to trade large and complex orders more efficiently.

Key People[edit]


Before BOX won approval for its own exchange license from the SEC in April of 2012, it had been regulated by Nasdaq OMX, a rival exchange operator. [7]

BOX had been operating as a unit of the Boston Stock Exchange, which agreed in 2007 to be acquired by Nasdaq OMX Group Inc. Under the terms of the deal, Nasdaq was responsible for regulating BOX, which handles about 4.8 percent of U.S. equity options trading at the time. Nasdaq is a direct competitor to BOX, so to avoid being regulated by a competitor, BOX applied for status as a separate exchange.[8]

In July 2006, the Boston Options Exchange completed migration to its new trading engine platform, SOLA, which is licensed from the Montreal Exchange. BOX has no designated specialists; competing market makers are responsible for ensuring liquidity. BOX uses a maker-taker model for most penny classes, in which the exchange pays a rebate to suppliers of liquidity and charges liquidity takers a fee.[9] BOX uses a price/time order matching algorithm. Traders can connect with BOX through a number of ISVs that offer front-end applications for BOX participants.[10]

On Aug. 29, 2008 the Montreal Exchange (MX), a founding partner and the technical operator of BOX, increased its ownership position to the maximum 53.2 percent from its previous 31.4 percent. The TMX Group acquired the MX earlier that year. The MX acquired a 21.9 percent ownership position from another senior BOX partner, the Boston Stock Exchange, Inc., as agreed in December of 2007.[11]

In May of 2010, BOX switched the location of its matching engine and revamped its underlying architecture as an additional enticement to the high frequency trading crowd. On May 10 of that year, BOX moved its matching engine into the Equinix NY4 data center in Secaucus, N.J. That was home to the International Securities Exchange's matching engine as well as a number of high-frequency traders. Proximity to the BOX's matching engine was intended to reduce turnaround time for high-frequency traders.[12]

BOX was approved by the SEC in April 2012 to act as its own self-regulatory organization. It had previously been regulated by Nasdaq OMX, a rival exchange operator. [13] As part of this restructuring, TMX Group (owner of the Montreal Exchange) took a 40 percent economic interest and a 20 percent voting interest in the new SRO. TMX maintains its ownership through its 53.8 percent stake in BOX Holdings Group LLC, which owns and operates the options trading platform.

In May of 2013, BOX was approved by the U.S. Securities Exchange Commission to trade a jumbo version of the SPDR S&P 500 Exchange Trade Fund ("Jumbo SPY Options").


As of May 12, 2008, BOX listed nearly 1500 classes for trading.

On February 10, 2015 BOX Options Exchange and The VolX Group announced an exclusive licensing agreement in which BOX will list RealVol SPY Options (VOLS) for trading, pending SEC approval. VOLS will be the first exchange-traded options based on the realized volatility of the broad U.S. equity market. VOLS offer direct exposure to the realized daily volatility exhibited by the SPDR S&P 500 ETF (symbol SPY). Currently, the majority of market participants are not able to trade, or hedge against, actual price risk of realized volatility directly. This type of risk-control tool has been offered only to large institutions in the over-the-counter volatility swaps marketplace.[14]


A key feature of the BOX market is the Price Improvement Period (PIP) auction, a patented automated trading mechanism which permits brokers to seek to improve executable client orders. BOX Participants executing agency orders as order flow providers (OFPs) and wishing to improve the client's price by taking the other side as principal signal this intent to the BOX market-place via a special order message submitted to the BOX trading engine; market makers on the class as well as other BOX trading participants can then compete for this order by bettering the price. At the end of a very short period, the client side of the trade is matched with the best prices available.[15]

On May 8, 2014, BOX announced it had achieved half a billion dollars in savings for investors through its price improvement period. In April 2014 price improved contracts on BOX averaged 300,510 per day, representing a 38% increase over the same period the previous year.

Annual Volumes[edit]

Year Total Annual Volume* Percent Change
2019 112,597,175 5.4%
2018 106,794,504 22.9%
2017 86,904,384 (-)20.4%
2016 109,202,724 5.7%
2015 103,268,442 4.8%
2014 98,486,620 10.0%
2013 89,546,651 (-)38.2%
2012 144,987,873 3.8%
2011 139,679,281 52.2%
2010 91,754,121 (-)33.4%
2009 137,784,626 (-)22.9 %
2008 178,650,541 37.6%
2007 129,797,339 --


BSTX (Boston Security Token Exchange), which is jointly owned by BOX Digital Markets LLC and tZERO, is a nascent stock market for tokenized securities whose proposed operation was rejected by the SEC in December 2020.[16] BSTX will operate as a facility of BOX Options Exchange. BOX provides strategic leadership and regulatory advice to BSTX and tZERO manages technology, administration, maintenance, and support.[17] tZERO operates its own registered alternative trading system (ATS) for security tokens, access to which is limited by its regulatory status.

For more information on BSTX, see the MarketsWiki entry here].