After 32 years in the business, the Chicago Board Options Exchange’s (CBOE) has launched two initiatives: CBOE’s Remote Market Maker (RMM) program and the start of a thirty-day period in which Chicago Board of Trade (CBOT) Full Members may consider selling their CBOE exercise rights.
The Remote Market Maker is a new class of CBOE membership designed to allow individual market makers and member organizations to engage in market making by streaming quotes and trading electronically at CBOE from any location.
Initially, there are 59 Remote Maker Makers participating in the program. RMMs will quote in the top 602 Hybrid-enabled options classes. The rollout, which began today with thirteen classes, is expected to continue over a three-month period.
Additionally, CBOE has formally initiated its offer to purchase CBOE exercise rights from CBOT Full Members who want to sell them. The thirty day window in which CBOT Full Members can sell their exercise right has now begun.
The purchase will be executed through a modified Dutch Auction process, with a price range of $60,000 to $100,000 for each “exercise right privilege,” which is a transferable interest representing the CBOE exercise right component of a CBOT Full Membership. CBOT Full Members who choose to do so, may offer to sell their exercise right privilege for any price within that range. At the conclusion of the offer period, CBOE will determine the clearing price and the number of exercise right privileges it will purchase. All CBOT members tendering at or below the clearing price whose exercise right privileges are purchased in the offer will receive the same price for their exercise right privilege. CBOT members may also offer to sell at the clearing price without specifying an individual sale price. CBOE is not obligated to purchase any minimum number of exercise right privileges.