Notice2026-06799
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of Amendment No. 1 to a Proposed Rule Change To Allow for Extended Trading of Multi-Listed Equity Options
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 9, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 68 (Thursday, April 9, 2026)</title>
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[Federal Register Volume 91, Number 68 (Thursday, April 9, 2026)]
[Notices]
[Pages 18010-18020]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06799]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105153; File No. SR-CBOE-2025-079]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of Amendment No. 1 to a Proposed Rule Change To Allow for
Extended Trading of Multi-Listed Equity Options
April 6, 2026.
On September 30, 2025, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to allow for extended trading sessions of multi-
listed equity options that meet certain eligibility criteria. The
proposed rule change was published for comment
[[Page 18011]]
in the Federal Register on October 3, 2025.\3\ On November 3, 2025,
pursuant to Section 19(b)(2) of the Act,\4\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\5\ On
December 23, 2025, the Commission instituted proceedings under Section
19(b)(2)(B) of the Act to determine whether to approve or disapprove
the proposed rule change.\6\ On March 23, 2026, the Commission
designated a longer period for Commission Action on the proposed rule
change.\7\ On April 2, 2026, the Exchange filed Amendment No. 1 to the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. Amendment No. 1 superseded the
proposed rule change as originally filed and replaced it in its
entirety. The Commission is publishing this notice to solicit comments
on the proposed rule change, as modified by Amendment No. 1, from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104160 (September
30, 2025), 90 FR 48091. Comments received on the proposed rule
change are available on the Commission's website at: <a href="https://www.sec.gov/rules-regulations/public-comments/sr-cboe-2025-079">https://www.sec.gov/rules-regulations/public-comments/sr-cboe-2025-079</a>.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104173, 90 FR 51424
(November 17, 2025).
\6\ See Securities Exchange Act Release No. 104509, 90 FR 61454
(December 31, 2025).
\7\ See Securities Exchange Act Release No. 105063, 91 FR 14730
(March 26, 2026).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend Rule 5.1 (Trading Days and Hours) to (i) allow for trading of
multi-listed equity options that meet certain eligibility criteria
during Global Trading Hours (``GTH'') and Curb Trading Hours (``Curb'')
sessions (collectively ``extended trading hours sessions''), (ii)
establish the GTH session for designated multi-listed equity options as
7:30 a.m. ET to 9:25 a.m. ET \8\ and the Curb session as 15 minutes of
trading from 4:00 p.m. to 4:15 p.m., or as otherwise permitted as an
extended trading session(s) on another exchange, and (iii) make changes
to additional rules as necessary to support extended trading hours
sessions for equity options. The Exchange initially submitted this rule
filing as SR-CBOE-2025-079 to the Securities and Exchange Commission
(the ``Commission'') on September 30, 2025 (the ``Initial Rule
Filing''). This Amendment No. 1 supersedes the Initial Rule Filing and
replaces it in its entirety. This Amendment No. 1 provides additional
support for the proposal and reclassifies the previously proposed
afternoon GTH session of 4:00-4:15 p.m. as a Curb session occurring
from 4:00 to 4:15p.m. for equity options designated as eligible for the
GTH session. This Amendment No. 1 clarifies the proposal by (1)
detailing the selection and removal process for equity options for
extended trading hours session, including the semiannual review process
for equity option GTH (and thereby Curb) eligibility and designation,
(2) defining series listing eligibility in GTH and Curb for equity
options, (3) providing when opening auction updates and FLEX Options
may be submitted for equity options in GTH and Curb, (4) extending
order routing processing to the market open that includes GTH, and (5)
including reference to equity options in the Global Trading Hours and
Curb Trading Hours Disclosure. The text of the proposed rule change is
provided in Exhibit 5.
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\8\ All times referenced herein are Eastern Time, unless
otherwise specifically noted.
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The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/options/regulation/rule_filings/bzx/">https://www.cboe.com/us/options/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 5.1 to allow for trading of
certain multi-listed equity options during extended trading sessions,
establish specific trading hours for GTH and Curb sessions during which
such multi-listed equity options may trade, and modify additional rules
as necessary to support trading of extended trading hours sessions in
equity options.
By way of background, the Exchange currently offers three trading
sessions: \9\ Regular Trading Hours (``RTH''), Curb, and GTH. Rule 5.1
sets forth the specific trading hours for each trading session. RTH for
transactions in equity options (including options on individual stocks,
ETFs, ETNs, and other securities) \10\ occurs from 9:30 a.m. to 4:00
p.m. Monday through Friday as the normal business hours set forth by
the primary markets trading the securities underlying the options,
except for options on certain ETFs, ETNs, Index Portfolio Shares, Index
Portfolio Receipts, and Trust Issued Receipts that the Exchange
designates to remain open for trading beyond 4:00 p.m. but in no case
will the RTH session continue after 4:15 p.m.\11\ The Curb session for
designated classes of index options trading on the Exchange is from
4:15 p.m. to 5:00 p.m., Monday through Friday.\12\ Trading in GTH for
index options trading on the Exchange occurs from 8:15 p.m. to 9:25
a.m. the next day, Monday through Friday.\13\ The Exchange's Rules
provide that the Exchange may designate as eligible for trading during
GTH any exclusively listed index option designated for trading under
Chapter 4, Section B. Currently, options on S&P 500 Index (``SPX'') and
CBOE Volatility Index[supreg] (``VIX'') as well as Cboe Mini SPX Index
Options (``XSP''), Russell 2000 Index (``RUT''), Mini-Russell 2000
Index (``MRUT''), and Cboe Magnificent 10 Index (``MGTN'') are approved
for trading during GTH and Curb.\14\
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\9\ The term ``trading session'' means the hours during which
the Exchange is open for trading for Regular Trading Hours, Global
Trading Hours or Curb Trading Hours (each of which may referred to
as a trading session), each as set forth in Rule 5.1. Unless
otherwise specified in the Rules or the context otherwise indicates,
all Rules apply in the same manner during each trading session. See
Rule 1.1 (Definitions).
\10\ See Rule 5.1(b)(1), which includes individual stocks, ETFs,
ETNs, and other securities within the term equity options.
\11\ See Rule 5.1(b)(1).
\12\ See Rule 5.1(d).
\13\ See Rule 5.1(c), which provides the index options that the
Exchange may trade during GTH and the hours of GTH for such index
options.
\14\ See Rule 5.1(c)(1).
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By way of further background, the Exchange originally adopted the
GTH trading session in 2014 due to global demand from investors to
trade SPX and VIX options as alternatives for hedging and other
investment purposes, particularly as a complementary
[[Page 18012]]
investment tool to VIX futures.\15\ In response to customer demand for
additional options to trade during the GTH trading session for similar
purposes, the Exchange designated XSP options as eligible for trading
during GTH in 2015.\16\ More recently, RUT, MRUT and MGTN were
designated to trade in GTH, again in response to investor demand.\17\
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\15\ See Securities Exchange Act Release No. 34-73017 (September
8, 2014), 79 FR 54758 (September 12, 2014) (SR-CBOE-2014-062).
\16\ See Securities Exchange Act Release No. 34-75914 (September
14, 2015), 80 FR 56522 (September 18, 2015) (SR-CBOE-2015-079).
\17\ See Securities Exchange Act Release Nos. 34-104228
(November 19, 2025) 90 FR 53013 (November 24, 2025) (SR-CBOE-2025-
070) and 34-104227; (November 19, 2025), 90 FR 53018 (November 24,
2025) (SR-CBOE-2025-071).
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The Exchange has been involved in numerous industry discussions and
has received feedback supporting the expansion of equity options
trading beyond RTH. Based on interest expressed for extended trading
hours in derivative products, the Exchange believes customer demand now
extends to trading equity options in extended trading hours sessions.
As previously indicated, transactions in most equity options may be
made on the Exchange during RTH between 9:30 a.m. through 4:00 p.m. in
alignment with the regular trading hours of the exchanges that list for
trading the equities underlying multiply-listed options. Trading hours
outside of regular market hours have expanded on equity exchanges that
list the underlying securities to equity options, but the trading hours
of options on such equities have remained unchanged. As a result,
investors are unable to access the options markets during the extended
trading hours when equities may trade, limiting investors' ability to
hedge equity transactions with options or utilize options for other
investment purposes or strategies. Additionally, based on feedback
received, the Exchange believes that the extension of trading hours
will make options trading more accessible to investors in other
countries and to U.S. investors who wish to trade options in expanded
trading hours alongside the underlying equity. Consequently, the
Exchange proposes to designate equity options that meet certain
criteria as eligible for trading during GTH, and such options will also
be eligible to trade in the Curb session. The addition of certain
equity options to GTH and Curb sessions will help align trading in such
options with the expanded trading that may now occur for their
underlying securities. The expansion of trading hours for certain
equity options will also help the industry keep pace with the
continuing internationalization of securities markets.
Although the time of RTH is currently consistent with the regular
trading hours of the other U.S. options exchanges and regular trading
hours of equities that underlie multiply-listed options, many U.S.
stock exchanges have established trading hours during various periods
of time outside of regular market hours.\18\ Securities trading has
become a global industry, but investors located outside of the United
States may find it difficult to participate in and may choose not to
access U.S. options markets during hours of RTH due to timing
constraints. The Exchange believes there is global demand from
investors to trade equity options for various investment purposes,
including to help limit downside risk by insulating equity holdings
from an undesired market move. However, given that equity options trade
during RTH only, it may be difficult for investors outside of the U.S.
to trade these options during RTH. Additionally, U.S. investors that
trade in equities outside of regular trading sessions are unable to
access a market in equity options for hedging and other purposes as
part of their investment strategies outside of RTH. With equities
trading in extended trading hours sessions on equity exchanges without
comparable trading hours in equity options, investors are unable to
enter into an options contract that could help protect an existing
equity position. Consequently, the Exchange believes the extension of
trading hours for equity options helps support investor protection
because investors will have a longer window of time in which to utilize
options for hedging and other investment strategies while equities are
also trading in extended trading sessions on underlying exchanges.
Therefore, the Exchange proposes to (1) amend Rules 5.1(c) to add
equity options to the type of product approved for trading on the
Exchange during GTH and establish the specific hours certain equity
options may trade in GTH as 7:30 a.m. to 9:25 a.m. Monday through
Friday, and (2) add new Rule 5.1(d)(2) to create a Curb session from
4:00 p.m. to 4:15 p.m. for equity options that are designated for
trading during the GTH session.
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\18\ See, e.g., <a href="https://www.cboe.com/about/hours/">https://www.cboe.com/about/hours/</a> (Early Trading
Sessions occur from 4:00 a.m. to 8:00 a.m., Pre-Market Trading
Sessions occur from 8:00 a.m. to 9:30 a.m., and Post-Market Sessions
occur from 4:00 p.m. to 8:00 p.m.; see also, e.g., <a href="https://www.nasdaq.com/market-activity/stock-market-holiday-schedule?force_isolation=true">https://www.nasdaq.com/market-activity/stock-market-holiday-schedule?force_isolation=true</a> (pre-market trading hours are 4:00
a.m. to 9:30 a.m. and after hours are from 4:00 p.m. to 8:00 p.m.).
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The Exchange notes that the designation of the 4:00 p.m.-4:15 p.m.
session as a Curb session is different than the Initial Filing.
Proposed rule text in the Initial Filing that designated the 4:00 p.m.
to 4:15 p.m. session as an after-market GTH session has been changed to
designate this session as a Curb session to align with existing
terminology for the Curb trading session that occurs for index options
after RTH and to provide flexibility for market order session
selections. The designation of this session as Curb will allow market
participants to determine which sessions their orders will trade in
outside of RTH, allowing for the exclusion of the 4:00 p.m. to 4:15
p.m. session if preferred. The Exchange believes the designation of the
4:00 p.m.-4:15 p.m. session as a Curb session, rather than as an after-
market GTH session or as an extension of RTH (as is the case for
certain ETFs designated to trade until 4:15 p.m.), is appropriate
because the proposed extended trading hours sessions will utilize
existing exchange functionality to mark order submissions as RTH-Only,
RTH and Curb, or All Sessions.\19\ The Exchange will maintain separate
trading sessions for extended trading hours to allow Users \20\ to
designate their own preferences for session order eligibility, thereby
giving Users flexibility and a risk mitigation mechanism provided
through Exchange functionality. Users with existing Cboe ports for RTH
will not need new Exchange ports for the extended trading hours
sessions and may designate the session(s) for an order by utilizing
simple tags through the Exchange ports to indicate the session(s) in
which an order may be executed.
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\19\ Orders marked for All Sessions will automatically carry
over and be actionable across all sessions, while those marked as
RTH-Only will not be actionable during the GTH or Curb sessions.
Those marked as RTH and Curb will be actionable during the RTH and
the Curb sessions.
\20\ See Rule 1.1, which states that the term ``User'' means any
Trading Permit Holders (``TPHs'') or Sponsored User who is
authorized to obtain access to the System pursuant to Rule 5.5.
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The Exchange recognizes that trading in equity options during GTH
and Curb sessions is a new and substantial initiative for the industry.
Therefore, the Exchange is approaching the extension of trading hours
through a conservative and cautious approach. The Exchange intends to
introduce extended trading hours by offering sessions that are shorter
than extended trading hours sessions for index options and equities.
This limited approach will allow the Exchange to assess how extended
[[Page 18013]]
trading hours sessions will develop and function. Consequently, the
Exchange proposes to offer (1) a GTH trading session prior to the
commencement of RTH from 7:30 a.m. to 9:25 a.m. Monday through Friday
(for equity options meeting certain criteria, as discussed below),
which is shorter than both the GTH session for index options and pre-
market extended trading hours for equities, and (2) a Curb session from
4:00 p.m. to 4:15 p.m., which is also shorter than both index option
and equity extended trading hours occurring after regular market hours.
Whereas index options eligible for GTH may trade between 8:15 p.m.
to 9:25 a.m. the next day \21\ and from 4:15 p.m. to 5:00 p.m. in Curb
for index options that trade on the Exchange \22\ to align with the
near 24 hour trading of related futures contracts, extended trading
hours sessions for equities do not extend over that same timeframe,
with the earliest available extended trading sessions for equities
typically commencing at 4:00 a.m. and the session after an exchange's
regular trading hours typically concluding at 8:00 p.m.\23\ Since
equity options generally will not trade unless the underlying security
also trades, the Exchange believes any trading hours outside of RTH
available for equity options should be limited to extended trading
hours available for underlying equity securities and will therefore be
shorter than extended trading hours for index options.\24\ Furthermore,
the extended trading hours sessions as proposed are shorter than the
extended trading sessions of equities to implement the Exchange's
cautious approach to introduce extended trading sessions for equity
options, with proposed Rules 5.1(c) and (d) establishing GTH and Curb
sessions for equity options that are shorter than the hours of extended
trading for equities. The Exchange believes that the shorter GTH
session running from 7:30 a.m. to 9:25 a.m. and Curb session from 4:00
p.m. to 4:15 p.m., rather than sessions that align with the full
extended trading hours sessions available for underlying equities, is
appropriate because of the lack of industry experience with extended
trading hours sessions for equity options that are physically settled.
Limiting the window of time for equity options in GTH and the Curb
sessions allows for a paced introduction of these types of trading
sessions for equity options. The limited trading session timeframes
will allow the Exchange to monitor and assess the development and
functioning of GTH and Curb sessions for equity options. Additionally,
the Exchange has been in discussions with numerous market participants
and, based on such discussions, believes that the proposed timeframe
for equity options extended trading hours sessions can be supported by
Market-Makers, clearing firms, and other market participants from a
personnel coverage perspective.
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\21\ See note 13 supra.
\22\ See note 12 supra.
\23\ See note 18 supra.
\24\ Trading hours on equity exchanges may expand further in the
future. See, e.g., <a href="https://ir.cboe.com/news/news-details/2025/Cboe-Announces-Plans-to-Launch-24x5-U.S.-Equities-Trading-2025-NwujmKvsxb/default.aspx">https://ir.cboe.com/news/news-details/2025/Cboe-Announces-Plans-to-Launch-24x5-U.S.-Equities-Trading-2025-NwujmKvsxb/default.aspx</a>.
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The end of the Curb session at 4:15 p.m. also aligns with the end
time of the extended RTH session for certain ETFs that may trade until
4:15 p.m., and as is the case for ETFs that trade until 4:15 p.m.,
trading on the expiration day of equity options will continue until
4:15 p.m. Since such options will be American-style with physical
settlement, market participants will have the ability to close expiring
positions rather than take or deliver shares through the Curb session.
This is consistent with the close time for ETF options trading until
4:15 p.m. but differs from SPXW PM-settled index options which stop
trading at 4:00 p.m. because such options are European-style and cash
settled. In all cases, The Options Clearing Corporation (``OCC'') \25\
marks closing and/or settlement prices based on the 4:00 p.m. National
Best Bid and Offer (NBBO). OCC also bases in-the-money and out-of-the-
money determinations based on the 4:00 p.m. closing price of the
underlying equity security. Based on discussions with OCC and certain
clearing firms, the Exchange does not expect the proposed addition of
an after-market session that extends trading by only 15 minutes and is
no later than the RTH hours for some ETF options will have any impact
on existing processes. As for GTH, the proposed early session for
equity options will begin at 7:30 a.m., two hours earlier than RTH. OCC
and clearing firms have indicated that their end-of-day processes are
designed to complete on the same business day, well before midnight. As
such, the Exchange does not expect the two-hour extension of early
trading hours to have any impact on daily processing when processing
occurs in the normal course. Consequently, the Exchange believes the
proposed timeframes for extended trading hours sessions supports the
Exchange's cautious approach for the introduction of GTH and Curb
sessions since the proposed times of each session will generally fit
within current operational processes.
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\25\ OCC is responsible for clearing and settlement of listed
options transactions.
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The Exchange's conservative and cautious approach for establishing
GTH and Curb sessions for certain equity options also addresses the
selection of equity options to trade in such sessions. In furtherance
of its approach, the Exchange proposes to limit the number of option
classes it may select for trading in extended trading hours sessions by
including in Rule 5.1(c) a limit of 100 equity option classes that may
be designated for trading during the GTH and Curb sessions. The limit
is intended to allow the Exchange to monitor and assess the development
and functioning of the new GTH and Curb sessions for equity options
within a controlled group of equity options initially.
The Exchange further proposes to amend Rule 5.1(c) by establishing
criteria an option class must meet to be eligible for GTH and Curb
trading in new Rule 5.1(c)(2).\26\ Specifically, the Exchange may
designate as eligible for trading during GTH, and therefore also as
eligible for trading during the Curb session through new Rule 5.1(d)(2)
(as described below), up to 100 multiply listed equity option classes
that may be designated for trading pursuant to Chapter 4, Section A and
for which in the preceding six calendar months (i) the option has an
average daily volume of 150,000 contracts, (ii) the underlying equity
to the option has a $50 billion market capitalization, and (iii) the
underlying equity to the option has an average daily trading volume of
10 million shares. The Exchange believes option classes with the
highest anticipated demand will be eligible for trading in extended
trading hours sessions based on the requirements established in
proposed Rule 5.1(c)(2) and (d)(2) and that the criteria above will
result in the listing of options in GTH and Curb sessions having
sufficient demand and liquidity to support a GTH market.\27\
Furthermore, the Exchange chose criteria so as to limit the initial
number of equity options eligible for extended trading hours to those
most likely to have the highest liquidity and to avoid options with
underlying securities that may
[[Page 18014]]
only have temporarily high volume or market capitalization.
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\26\ Existing Rule 5.1(c)(2)-(4) will be renumbered as Rule
5.1(c)(3)-(5), and existing Rule 5.1(d)(2)-(4) will be renumbered as
Rule 5.1(d)(3)-(5).
\27\ Proposed rule text in the Initial Filing that permitted
accelerated eligibility for certain equity options with underlying
securities recently listed as a result of an initial public offering
has been removed from Amendment No. 1 to simplify the proposal.
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For equity options the Exchange designates as eligible to trade
during GTH pursuant to proposed Rule 5.1(c)(2), such equity options
designated for GTH trading may also trade in the new Curb session
pursuant to proposed Rule 5.1(d)(2). Therefore, any option designated
as eligible for GTH will also be designated as eligible for the Curb
session. The new Curb session will allow market participants to engage
in the trading of certain equity options in conjunction with trading in
the equities underlying these options for a limited period of time
after regular market hours on the underlying markets. Specifically
regarding Curb trading from 4:00 p.m. to 4:15 p.m. for equity options
designated for extended trading hours sessions, the Exchange recognizes
that company announcements for the equities underlying options may be
made after regular trading hours on the underlying exchange concludes,
and it is possible that news significantly impacting the value of the
underlying security may be released between 4:00 p.m. and 4:15 p.m.
while trading in the option for such equity occurs during the Curb
session. The Exchange notes that if such announcement results in the
halt of the underlying security for a period of time, trading in the
option should also halt once the Exchange receives notification of the
underlying halt. As is the case in RTH, the Exchange intends to halt
trading upon receipt of regulatory halt indicators from the Securities
Information Processors (``SIPs''). Additionally, the authority that the
Exchange has to declare manual halts in the interest of fair and
orderly markets will also apply to extended trading hours sessions for
equity options.\28\ In the event that the underlying equity continues
to trade and its price moves significantly in either direction in
response to company announcement or other news, the availability of an
options market in extended trading hours provides investors with the
opportunity to place an options trade to potentially hedge against an
adverse move or execute an option strategy in response to the price
movement on the underlying market. The Exchange also notes that
announcements of the effectiveness of a corporate action made after
4:00 p.m. (that do not result in the halt of the underlying security to
an option) is similar to the announcement of a corporate action that is
made prior to 4:00 p.m. In both scenarios, if the corporate action
results in an option contract adjustment, such contract adjustment
would not be effective until the next trading day.\29\ OCC makes
contract adjustment determinations on a case-by-case basis \30\ and
such determinations are announced on the OCC website. Presumptions may
be made by investors as to whether a contract adjustment will be made
(and such presumptions may be correct or incorrect) or an investor may
be unaware of the announcement of a corporate action or the
announcement of a contract adjustment regardless of whether the
announcement on the underlying security event is made before or after
4:00 p.m. Consequently, corporate action announcements made during the
additional 15 minutes of trading during the Curb session will generally
have the same impact as corporate action that are announced as
effective during the RTH session.
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\28\ See Rule 5.20.
\29\ Using capital gains distributions as an example, if the
issuer of an ETF announces a capital gains distribution the
afternoon before the ex-distribution date and the event will result
in a contract adjustment to the options on such ETF (pursuant to the
OCC Rules and By-Laws), it is likely that the contract adjustment
will be announced the same day as the ETF capital gains distribution
announcement, and the contract adjustment announcement will confirm
the effective date of the contract adjustment as the next trading
day. See, e.g. OCC Information Memo #58077. Although less frequent,
corporate action announcements for an equity option can occur in a
similar manner, with the initial announcement of a corporate action
made late on the day prior to the effective date of the corporate
action (and resulting contract adjustment to the option, if
applicable).
\30\ See OCC Information Memo #54262, which describes OCC's
dividend adjustment policy and reminds investors all adjustment
decisions are made on a case-by-case basis by OCC.
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To determine which options are eligible and designated by the
Exchange for extended trading hours sessions, the Exchange will
identify on a semiannual basis (following each January 1 and July 1)
the option classes meeting the criteria in proposed Rule 5.1(c)(2) and
select up to 100 of such option classes to be designated for trading in
GTH and Curb sessions; however the Exchange has discretion to determine
which of the eligible option classes will be designated to trade in the
GTH and Curb sessions. The Exchange is not obligated to include all
options that meet the criteria in extended trading hours sessions, and
the number of designated equity options may be less than 100 designated
option classes.
For the initial process to determine the equity options that meet
the criteria in Rule 5.1(c)(2), the Exchange will use data from the
nearest six-month period ending either June 30 or December 31 prior to
prior to launch of equity options trading in GTH and Curb sessions. The
initial list of options designated for trading in extended trading
hours sessions will be announced in an Exchange notice (``GTH Exchange
Notice''), and the first day of trading for equity options in GTH and
Curb sessions will also be announced in the GTH Exchange Notice.\31\
The Exchange will designate options for trading in GTH and Curb
sessions from the equity options meeting the criteria in Rule
5.1(c)(2). Following the initial selection process, the Exchange will
conduct a review twice per year to reassess the list of eligible equity
options using data from July 1 through December 31, and again based on
data from January 1 through June 30.\32\ The Exchange will designate
equity options eligible for trading in GTH and Curb sessions and
publish the updated list of designated equity options via GTH Exchange
Notice following completion of a semiannual review, and newly
designated option classes may begin trading on the first trading day of
February and August, respectively.
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\31\ The initial listing of equity options in extended trading
hours sessions will be selected by the Exchange and is not subject
to the listing date requirements of the semiannual review process
that will occur after the launch of the new trading sessions.
\32\ The Exchange intends to determine options that are
initially designated for GTH and Curb sessions at that time of the
approval of this Amendment No. 1 based on the most recent 6-month
review cycle and subsequently will conduct reviews semiannually
commencing the next review cycle.
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New Rule 5.1(c)(2)(B) further specifies the semiannual review
process for the selection of equity options designated for trading in
extended trading sessions by detailing how option classes may be
removed from the list of designated options. If an option that was
previously designated for trading in extended trading hours no longer
meets the criteria in Rule 5.1(c)(2) following a semiannual review, the
Exchange will identify any such equity option class and provide the
last day of trading in extended trading hours sessions for each such
option class in the semiannual GTH Exchange Notice. Equity options
identified as no longer meeting eligibility requirements for GTH and
Curb sessions will be removed from extended trading hours sessions
within 18 months of the determination that the option class no longer
meets GTH and Curb eligibility criteria, and the last day of trading
for any such equity option class during GTH and Curb sessions will be
communicated through the GTH Exchange Notice. Providing a notice of
removal of an equity option class from GTH and Curb sessions up to 18
months after the date the option class is determined to be no longer
eligible for extended trading hours sessions will
[[Page 18015]]
avoid sudden market disturbances resulting from the abrupt removal of
any such option from GTH and Curb sessions. Allowing the Exchange to
determine a removal date within 18 months ensures that, except for
certain longer dated series, open interest existing in the equity
option class to be removed from GTH and Curb sessions will have
generally expired. Additionally, the 18-month period will allow for two
additional semiannual review cycles during which equity options
previously designated for removal may subsequently meet eligibility
criteria again and consequently may continue to trade in GTH and Curb
sessions pursuant to new Rule 5.1(c)(2)(B)(iii).
Whereas the removal process established in new Rule 5.1(c)(2)(B)(i)
is intended to provide an extended time period for the removal of
equity options to avoid sudden market disruptions, the Exchange
acknowledges that certain conditions, although unlikely, may warrant an
acceleration of removal of an equity option class from GTH and Curb
sessions. Consequently, new Rule 5.1(c)(2)(B)(ii) allows the Exchange
to remove an equity option class from trading during GTH and Curb
sessions prior to the announced removal date if the Exchange observes
limited or no market activity in GTH and Curb sessions for the option
class. If such a condition is observed, the Exchange may remove the
option class from trading in GTH and Curb sessions with at least seven
days notice. The Exchange may remove the option class from GTH and Curb
sessions prior to the removal date by issuing an Exchange notice
designating a new removal date for the option class from GTH and Curb
sessions. Additionally, pursuant to Rule 5.1(c)(2)(C), the Exchange may
remove any option class from trading in GTH and Curb sessions for any
reason with at least 30 days notice. The Exchange expects to use such
authority in limited situations, such as in response to Market-Maker or
Designated Primary Market Maker preference or concern regarding
continued extended trading hours sessions in a particular option class
or the announcement of an unusual corporate action on the underlying
equity to an option class (and the effective date of such corporate
action is not imminent) that could introduce confusion or uncertainty
about the value of an option, thereby significantly reducing liquidity
during GTH or Curb sessions for the option class. Similarly, the
Exchange may immediately remove an option class from GTH and Curb
sessions if the Exchange deems such action is necessary in the interest
of investor protection or the maintenance of fair and orderly markets.
For example, if a corporate action that was not previously announced on
the underlying security is effective immediately and results in a
substantial change to the value or composition of the underlying
security (such as may be in the case of a reorganization, among
others), the Exchange may immediately remove the option from trading in
GTH and Curb sessions. The Exchange will provide notice of such
determination as soon as practicable after the determination to remove
has been made. Any option class designated for removal from GTH trading
pursuant to new Rule (2)(B) and that is included in the 100 multiply
listed option class limit will continue to be included in the 100
option class limit until the removal date of any such option class.
The Exchange may also designate for trading during GTH and Curb
sessions any equity option class that is traded on another exchange
during GTH or any other extended trading hours session. Any equity
option trading on the Exchange during extended trading hours sessions
because the option was initially traded by another exchange during an
extended trading session will not be counted against the 100-option
class limit in proposed Rule 5.1(c). The Exchange believes exclusion of
such equity options initially listed for trading on another exchange
during that exchange's extended trading session from the 100-option
class limit is appropriate for competitive as well as market protection
purposes. For example, if other option exchanges adopt the Exchange's
qualification criteria, the exact same list of options would be
eligible for extended trading hours sessions pursuant to rules of such
other exchange(s) as would be eligible under the Exchange's Rules.
However, if more than 100 equity options met the eligibility criteria,
the Exchange could designate up to 100 of any the equity options that
met the criteria for trading in extended trading hours sessions, and
the Exchange's selection could be different than those selected by
another exchange for trading in extended trading hours sessions.
Additionally, it is possible that another exchange may adopt different
eligibility criteria and/or select more than 100 equity option classes.
In either situation in which another exchange could designate for
trading equity options that differ from the equity options designated
by Cboe Options for trading in GTH and Curb sessions, Cboe Options may
list those equity options designated by another exchange and such
options selected in this manner would not count towards the Exchange's
100 equity options limit for extended trading hours sessions.\33\
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\33\ Cboe Options is not obligated to list for trading in
extended trading hours sessions selected by another exchange.
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This provision would allow for trading in these options during
extended trading hours on multiples exchanges. Options trading on
multiple exchanges can encourage competition, improve market
efficiencies and increase liquidity while offering investors more
trading opportunities. Consequently, the Exchange believes it is
appropriate to have the ability to trade options that are multiply-
listed for RTH sessions, that the Exchange is permitted to list, and
that may trade in extended trading hours on another exchange (through
that exchange's extended trading hours rules) without impacting the
administration of the Exchange's extended trading hours sessions
specifically established pursuant to the Exchange's Rules.
Additionally, this exclusion from the 100-option class limit is similar
in structure to, for example, the rules for Short Term Options Series
which allow the Exchange to list additional option classes selected by
other exchanges under their short term option rules and such selections
are in addition to the 50 Short Term Option Series classes that the
Exchange may select.\34\ The exclusion is also in alignment with the
Exchange's ability to initially list for trading options that meet the
Exchange's listing requirements for continued listing and are traded on
at least one other exchange.\35\
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\34\ See Rule 4.5(d)(1).
\35\ See Rule 4.3, Interpretations and Policies .01(c).
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Additional rule amendments are necessary to establish extended
trading hours sessions for equity options. As stated in new Rule
5.1(c)(2), FLEX Options may trade during GTH if the standard equity
option with the same underlying security as the FLEX Option is
designated to trade during extended trading hours sessions. This aligns
with the eligibility of index FLEX Options to trade during GTH as
established by Rule 5.1(d)(1). To clarify when FLEX Option orders may
be submitted during GTH, the Exchange proposes to amend Rule 5.71(b)(2)
to clarify that existing rule text stating that FLEX orders may be
submitted after 8:15 p.m. (previous day) is applicable for FLEX Options
on an index and establish that an equity FLEX Option that is designated
to trade during extended trading hours sessions may be submitted after
7:30 a.m. for the GTH
[[Page 18016]]
session. To clarify when FLEX Option orders may be submitted during
Curb, the Exchange proposes to amend Rule 5.71(b)(3) to clarify that
existing rule text stating that FLEX orders may be submitted after 4:15
p.m. is applicable for FLEX Options on an index and establish that an
equity FLEX Option that is designated to trade during extended trading
hours sessions may be submitted after 4:00 p.m. for the Curb session.
The Exchange also proposes to change existing Rule 5.1(c)(2) to new
Rule 5.1(c)(3) and amend the subparagraph by (1) clarifying that the
existing reference to Rule 4.13 (Series of Index Options) is applicable
to index options, thereby requiring that series selection for index
options in GTH meet the requirements in Rule 4.13 and (2) adding
reference to Rule 4.5 (Series of Option Contracts Open for Trading) for
equity options, thereby requiring that series selection for equity
options in GTH meet the requirements in Rule 4.5. Consequently, the
Exchange may list for trading in GTH any series in eligible classes
that it may list pursuant to Rule 4.13 for index options and Rule 4.5
for equity options. Similarly, the Exchange proposes to change existing
Rule 5.1(d)(2) to new Rule 5.1(d)(3) and amend the subparagraph for
series eligibility to associate the reference to Rule 4.13 to index
options trading during the Curb session and add reference to Rule 4.5
for equity options. As a result, the Exchange may list for trading in
Curb any series in eligible classes that it may list pursuant to Rule
4.13 for index options and Rule 4.5 for equity options, and such series
will be eligible to trade in all sessions.
To address holidays, the Exchange proposes to amend Rule 5.1(e) to
clarify that, unlike GTH for index options, GTH for equity options will
not occur on a holiday by stating that GTH references to holiday
trading for GTH commencing on a holiday are applicable to index
options. A GTH session for index options may (1) commence the evening
prior to and extended into the morning of, or (2) commence on the
evening of and extend into the morning following a domestic holiday
\36\ or an international holiday.\37\ The Exchange proposes to amend
Rule 5.1(e)(1) and (2) to state the GTH sessions for equity options on
the day following a holiday will be the standard GTH session. Since the
GTH session for equity options will commence at 7:30 a.m., the GTH
session for equity options will not extend from a prior day to a
holiday into the holiday or from the evening of a holiday into the next
day as GTH for index options do, and consequently GTH trading for
equity options will not occur on a holiday. Similarly, no trading will
occur on a holiday during the Curb session under existing Rule 5.1(e),
and this rule will apply to the Curb session for equity options.
---------------------------------------------------------------------------
\36\ See Rule 5.1(e)(1).
\37\ See Rule 5.1(e)(2).
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The Exchange notes that while Rule 5.20(f)(1) and (2) are specific
to index options, Rule 5.20(f)(3) permits the Exchange to determine to
manually halt or resume trading during GTH if determined to be in the
interests of a fair and orderly market and to protect investors, and
this provision will apply to equity options trading during GTH as well.
Existing Rule 5.20(a), which is not limited to RTH, will also provide
the Exchange with authority to halt trading in equity options during
GTH and Curb sessions in the same manner as RTH.\38\
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\38\ Proposed rule text in the Initial Filing included new Rule
5.20(g) as a separate subparagraph for equity options in GTH. This
subparagraph has been removed from Amendment No. 1 because it was
duplicative of the provisions in Rule 5.20(a) which will apply to
equity options in extended trading hours sessions.
---------------------------------------------------------------------------
Pursuant to the Options Order Protection and Locked/Crossed Market
Plan (``Linkage Plan''),\39\ participant exchanges to the Linkage Plan
established a framework to provide order protection. The Linkage Plan
(and Exchange Rules 5.65 through 5.67 regarding intermarket linkage)
will apply during all trading sessions during which multiply listed
options trade. Rule 5.36 addresses order routing away from the Exchange
to promote compliance with the Linkage Plan. As the Exchange may route
orders during GTH and Curb sessions in multiply listed options if
another U.S. options exchange lists the same options outside of RTH,
Rule 5.36 will apply during GTH and Curb, and the Exchange proposes to
amend Rule 5.36(a) to change the time when the order routing process is
first available to a User from 9:30 a.m. to market open. Since Rule
5.36(a) currently states that the order routing process will be
available until market close, the Exchange believes it is appropriate
to modify the rule to state that the order routing process will be
available from market open to market close, and such terms are
inclusive of all trading sessions for Rule 5.36. Consequently, Users
may designate an order for routing (or not available for routing)
during all trading sessions for multi-listed equity options. The
Exchange System is designed to, at all times, prevent trade-throughs
and avoid displaying locked/crossed markets in accordance with the
Linkage Plan, and, as proposed, Users' orders will be eligible for
routing during GTH and Curb, just as they are during RTH.
---------------------------------------------------------------------------
\39\ The Linkage Plan requires U.S. options exchanges to
establish a framework for providing order protection and addressing
locked and crossed markets in eligible options classes. The Linkage
Plan is a national market system plan approved by the Commission
pursuant to Section 11A of the Act and Rule 608 thereunder. The full
text of the Linkage Plan is available at <a href="https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf">https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf</a>.
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The Exchange will replicate its current multi-list opening process
and apply it to the new GTH session in the morning. Consequently, the
Exchange proposes to amend the Opening Auction Process in Rule 5.31 to
incorporate GTH for equity options. The current definition of Queuing
Period provides that the Queuing Period for GTH for All Sessions
Classes begins at 8:00 p.m., 15 minutes prior to the commencement of
GTH. The Exchange proposes to amend the definition to apply the
existing Queuing Period beginning at 8:00 p.m. to index options and
establishing a Queuing Period for equity options in GTH commencing at
7:15 a.m., also 15 minutes prior to the commencement of the GTH
session. The Exchange further proposes to amend the definition of
Opening Rotations Triggers to establish Opening Rotation Triggers
processing for equity options in GTH by duplicating the existing
Opening Rotations Triggers processing of RTH equity options for GTH
equity options. The proposed amendments to the definitions of Queuing
Period and Opening Rotations Triggers extend existing processing
framework to equity options in GTH. The Exchange may modify opening
collar and maximum composite widths during GTH in the same manner it
may during RTH in accordance with the remainder of Rule 5.31.
Additionally, to clarify when the Exchange may begin disseminating
opening auction updates for equity options in GTH, the Exchange
proposes to amend Rule 5.31(c) to clarify that existing rule text
stating that opening auction updates may begin after 8:00 p.m.
(previous day) for GTH trading is applicable for index options and
establish that the time after which opening auction updates may be
disseminated for equity options as 7:15 a.m. for the GTH session.
The Opening Auction Process is not applicable to the Curb session
for equity options. In the new GTH session, trading activity in the
underlying securities may not see high levels of liquidity, potentially
leading to more manual intervention from Market-Makers to manage risk.
The Exchange will open options in the GTH session in
[[Page 18017]]
the same manner as in RTH, regardless of whether there is a wide quote
in the underlying or no available quote. However, since equity markets
begin trading much earlier than the proposed start of the GTH session,
the Exchange does not believe it is likely that underlying quotes will
not be available at the time the GTH session commences. An option will
not open for trading unless the composite market, comprising the best
local appointed Market Maker quote, bound by the away Best Bid and
Offer (``BBO''), is within a configured opening price collar. There is
no provision to prevent the opening based on the width of the
underlying market.
Rule 9.20 (Global Trading Hours Disclosure) provides the required
disclosures that a Trading Permit Holder must make to a customer prior
to the customer trading during GTH and Curb sessions and these
disclosures will apply to equity options trading extended trading hours
sessions. The Exchange proposes to update the rule to (1) clarify that
certain references to lack of to an underlying index or portfolio value
or lack of regular trading in the securities underlying the index or
portfolio apply to index options in extended trading hours sessions and
(2) add reference to the absence of an underlying price or lack of
regular trading in the underlying equity for equity options in GTH and
Curb.
Whereas certain processing aspects of GTH and Curb for equity
options require explicit additions to the Rules, other GTH and Curb
trading rules as currently stated will apply to equity options
designated for trading in extended trading hours sessions.
<bullet> Electronic Trading: As stated in current Rules 5.1(c)(4)
and 5.1(d)(4), all trading in GTH and Curb sessions is electronic only.
<bullet> Book: As stated in definition of ``Book'' in Rule 1.1, a
single book is used during all trading sessions.
<bullet> Participants: As stated in Rule 3.61(a), in order to
participate in GTH, a Trading Permit Holder must have a letter of
guarantee from a Clearing Trading Permit Holder that is properly
authorized by OCC to operate during the GTH session. Rule 3.61(a) is
not applicable to trading during the Curb session. The Exchange may
approve Market-Makers to act as Lead Market Makers (``LMM'') during GTH
as provided in Rule 3.55 and in accordance with Rule 5.55. If an LMM is
approved to act as an LMM during Global Trading Hours pursuant to Rule
3.55, then the LMM must comply with the continuous quoting obligation
and other obligations of Market-Makers as referenced in Rule 5.55(b).
<bullet> Transactions Including Obvious Errors: As stated in Rule
6.5(d)(2), a notification must be received within 2 hours of the close
of the GTH session if a party believes that it participated in a
transaction that was the result of a Catastrophic Error. For
transactions occurring during the Curb session, notifications must be
received by the Exchange by 8:30 a.m. on the first trading day
following the date the transaction was executed.
<bullet> Auction Functionality: The Exchange currently offers a
variety of auction mechanisms that provide price improvement
opportunities for eligible orders. Particularly, the following auction
mechanisms offered by the Exchange may be utilized in Curb and GTH
sessions: Complex Order Auction (``COA''),\40\ Step Up Mechanism
(``SUM''),\41\ Automated Improvement Mechanism (``AIM''),\42\ Complex
AIM (``C-AIM''),\43\ Solicitation Auction Mechanism (``SAM''),\44\
Complex SAM (``C-SAM''),\45\ FLEX Auction Process,\46\ FLEX AIM \47\
and FLEX SAM.\48\ Pursuant to rules for each auction mechanism and Rule
1.5 (which permit the Exchange to determine whether to activate an
auction on a class-by-class basis a session by session basis), the
Exchange may determine whether to activate an auction for a class
during GTH and Curb. To the extent the Exchange does, each such auction
will function in the same manner during GTH and Curb as it does during
RTH.
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\40\ See Rule 5.33(d).
\41\ See Rule 5.35.
\42\ See Rule 5.38.
\43\ See Rule 5.37.
\44\ See Rule 5.39.
\45\ See Rule 5.40.
\46\ See Rule 5.72(c).
\47\ See Rule 5.73.
\48\ See Rule 5.74.
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<bullet> Risk Controls: The Exchange has various price protection
mechanisms and risk controls available to market participants as set
forth in Rule 5.34. These will apply in the same manner during GTH and
Curb as they do during RTH for equity options (except as otherwise
described), as is the case today for index options that trade during
GTH and Curb. The Exchange notes it recently proposed to amend the wide
market protection in Rule 5.34(a)(5) to allow the Exchange to activate
that protection not only on a class-by-class basis (as currently
permissible), but also on a trading session-by-trading session
basis.\49\ When operative (which will be prior to the Exchange's launch
of GTH and Curb trading for multiply listed options), this proposed
rule change will provide the Exchange with flexibility necessary to
determine whether to apply this mechanism during GTH and Curb. The
Exchange may determine it not appropriate to activate this protection
during GTH and Curb given the differences of trading characteristics
and market conditions in those trading sessions, such as wider markets,
compared to RTH.
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\49\ See Securities Exchange Act Release No. 34-105098 (March
26, 2026), 91 FR 16036 (March 31, 2026).
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<bullet> Market Orders: User will not be able to submit market
orders in equity options during the GTH and Curb sessions, as is the
case today during GTH and Curb for index options.\50\
---------------------------------------------------------------------------
\50\ See Rule 5.6(b) (definition of market order).
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<bullet> Market-Maker Obligations and Requirements: Market-Maker
obligations contained in Rule 5.51 and quoting requirements contained
in Rule 5.52 apply to Market-Makers in GTH and Curb sessions. As set
forth in Rule 5.50(a), an appointment applies to that class during all
trading sessions.\51\ Additionally, pursuant to Rule 5.52(d)(2)(E), the
electronic continuous quoting obligations of Market-Makers set forth in
Rule 5.52(d) apply to a Market-Maker across trading sessions (e.g., if
a Market-Maker has an appointment in a class that is open for trading
during Regular Trading Hours, Global Trading Hours and Curb Trading
Hours, the Exchange will determine a Market-Maker's compliance with the
continuous electronic quoting requirement during the trading day). This
is consistent with Market-Maker obligations applicable to classes
currently eligible for trading during GTH and Curb.
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\51\ The Exchange has filed SR-CBOE-2026-016 to provide that
Designated Primary Market-Makers (``DPMs'') obligations and
participation entitlements will apply to GTH and Curb sessions. See
Securities Exchange Act Release No. 104807 (Feb. 10, 2026), 91 FR
6966 (Fed. [sic] 13, 2026).
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<bullet> Eligible Expirations: GTH and Curb sessions will utilize
existing criteria for listing option series for an option class. For
example, Monday and Wednesday expirations found in RTH will be
applicable to equity options in extended trading hours sessions.
The Exchange notes that no operational changes will be required for
clearance and settlement.\52\ The Exchange has held discussions with
[[Page 18018]]
OCC, and OCC has informed the Exchange that it will be able to clear
and settle all transactions that occur on the Exchange and handle
exercises of options during the proposed extended trading hours
sessions. OCC already clears Cboe index options in extended trading
hours as well as certain ETFs that are eligible pursuant to Exchange
Rules to trade until 4:15p.m. as part of RTH. Therefore, OCC already
has the operational functionality to support the proposed GTH and Curb
trading hours for equity options that are less than the current hours
for index options traded on the Exchange.
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\52\ It is the Exchange's understanding that OCC will file a
rule change to support the extension of trading hours for equity
options. The Exchange will delay the launch of equity options
trading in extended trading hours sessions until approval of OCC's
rule filing permitting clearance and settlement of equity options
transactions in such sessions.
---------------------------------------------------------------------------
The Exchange intends to submit a separate rule filing to add
maximum Market Maker quote width requirements to its Rules in advance
of the launch of equity options in GTH and Curb sessions. Pursuant to
that proposed rule change, quote width requirement rules would be
applicable during GTH and Curb sessions.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\53\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \54\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \55\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\53\ 15 U.S.C. 78f(b).
\54\ 15 U.S.C. 78f(b)(5).
\55\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the proposed rule change will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest. The proposed rule change expands the
investment opportunity of extended trading hours to an additional type
of option, and the expansion is consistent with the continued
globalization of the securities markets while improving the alignment
of the Exchange's trading hours with extended trading hours of stock
exchanges. The Exchange believes the proposed rule change will enhance
competition by providing a service to investors that other options
exchanges currently do not provide; however, it is anticipated that
other option exchanges will seek to trade equity options in extended
trading hours in the future. The Exchange believes that competition
among exchanges ultimately benefits the entire marketplace. Given the
robust competition among the options exchanges, innovative trading
initiatives are consistent with the above-mentioned goals of the
Exchange Act.
While no other options exchange currently provides trading in
equity options outside of RTH, the Commission has authorized stock
exchanges to be open for trading outside of those hours pursuant to the
Act. The Exchange believes it is reasonable to trade a limited number
of equity option classes for which demand is anticipated to be the
highest during GTH and Curb sessions to allow for a conservative
approach to the introduction of equity options in extended trading
sessions. In furtherance of this conservative approach, the Exchange
proposes a shorter length of time for extended trading hours compared
to extended trading hours for underlying equities. The Exchange
recognizes the existing disparity in trading hours between equity
options and the securities that underlie such options and considers the
proposed trading hours expansion as an initial and necessary step to
better align extended trading hours for equity options with the trading
hours of their underlying securities. Equity option trading hours
currently are limited in comparison to the increased trading hours for
other financial instruments. As a result of the limited number of
trading hours for equity options, investors are unable to execute
options transactions outside of RTH and therefore are unable to utilize
options trading in extended trading sessions to hedge equity positions
or to utilize other option strategies outside of RTH when equities are
able to trade. As options are recognized as an investment tool that can
help investors protect existing equity positions against price
movements, extending trading hours for equity options will provide
investors with access to the market for longer periods of time, thereby
expanding access to options as a tool for risk mitigation available for
use when options may trade concurrently with the underlying securities
to such options.
Apart from specific trading hours and holidays, much of the
Exchange's existing GTH and Curb trading rules will apply to GTH for
equity options, including the Exchange's existing trading halt rules.
As a result, GTH and Curb sessions for equity options will largely
function with the framework already established by rules that have been
approved by the Commission as being consistent with the goals of the
Act.
The Exchange notes that OPRA, as the central data consolidation and
dissemination system for the U.S. options markets which consolidates
options quotes and trade data from all U.S. options exchanges and
distributes real-time market data to market participants, data vendors
and the public, has indicated that it can accommodate extended trading
hours commencing at 7:30 a.m. for the GTH session and from 4:00 p.m. to
4:15 p.m. for the Curb session on existing OPRA RTH lines.\56\ The OPRA
RTH lines will be used for quote distribution and trade data for equity
options trading in GTH and Curb trading sessions through the existing
OPRA RTH platform.\57\ Consequently, OPRA will have capacity to
accommodate other option exchanges that may pursue extended trading
sessions in the specific timeframes proposed by the Exchange for the
GTH and Curb sessions. Additionally, existing market participants with
OPRA connectivity to RTH lines are already connected to lines that will
accommodate those who wish to participate in extended trading hours
sessions.
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\56\ Although equity options activity will utilize OPRA RTH
lines, GTH and Curb session trades will not be last trade eligible
and will not count toward the daily high/low prices.
\57\ Cboe proprietary index options will continue to be quoted
and trade on the OPRA GTH system during GTH hours for index options.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because all Trading Permit
Holders may obtain authorization to trade during extended trading hours
sessions. The Exchange notes the proposed rule
[[Page 18019]]
change does not impose additional burdens on those Trading Permit
Holders that do not elect to trade during the GTH session. The Exchange
believes the obligations imposed on Trading Permit Holders to be
eligible to trade during GTH is an appropriate balance of obligations
of additional requirements with the benefits of additional trading
sessions.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change is a new competitive initiative that will benefit
the marketplace and investors. The Exchange also believes the proposed
rule change will enhance competition by providing new trading sessions
to investors that other options exchanges currently are not providing.
Additionally, all options exchanges are free to compete in the same
manner, and it is anticipated that other option exchanges will also
pursue trading in extended trading hours sessions.
The Exchange notes that a Public Comment Letter was submitted by
Nasdaq exchanges (``Nasdaq'') in response to the Initial Filing. The
letter stated that Nasdaq intends to pursue extended trading hours and
requested the approval of the Initial Filing be conditioned on the
readiness of the SIP, which disseminates information for OPRA, and OCC.
As stated previously, OPRA and OCC have confirmed operational readiness
to support the extended trading hours proposed by Cboe Options and
extended trading hours proposed by other options exchanges. The
Exchange acknowledges that physically settled equity options differ
from cash-settled index options and therefore has discussed with OCC
its ability to support equity options in extended trading hours
sessions. OCC has indicated that it is operationally ready to support
equity options in the proposed extended trading hours sessions and will
utilize its existing processes and margin requirements for extended
trading hours. OCC already clears index options in extended trading
hours for certain Cboe index options as well as certain ETFs and other
products that are eligible pursuant to Exchange Rules to trade until
4:15p.m. as part of RTH and therefore has the functionality to support
the proposed GTH and Curb trading hours for equity options that are
less than the current hours for index options traded on the Exchange.
To be eligible to participate in equity options in GTH, OCC has
indicated it will utilize the same special authorization requirements
as it does for index options. The Exchange also requires special
authorization for participation in extended trading hours sessions,\58\
and the Exchange will not authorize GTH eligibility for any TPH that is
not authorized by OCC. As OCC and the Exchange intend to apply current
GTH authorization procedures for index options to equity options
collectively, a TPH that is already eligible to trade index options
during GTH will not require any further authorizations to trade equity
options during GTH. TPHs that are not currently eligible for GTH but
wish to trade in the GTH session will have to receive authorization
from both OCC and the Exchange in order to trade during GTH (in the
same manner they would today for index options). As stated previously,
the Exchange believes the obligations imposed on Trading Permit Holders
to be eligible to trade during GTH is an appropriate balance of
obligations of additional requirements with the benefits of additional
trading sessions. There is no special authorization required for
participation in the Curb session.
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\58\ See Rule 3.1(a)(4).
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The Securities Industry and Financial Markets Association
(``SIFMA'') also submitted a Public Comment Letter in response to the
Initial Filing. SIFMA's letter raised concerns about OPRA and OCC
readiness for extended trading hours sessions, and such concerns have
been addressed above. SIFMA also requested a delay in launching GTH and
Curb sessions for equity options after regulatory approval is obtained
for these sessions. In response to SIFMA's requested delay in the
launch of GTH and Curb for equity options, the Exchange intends to not
launch equity options in extended trading hours sessions until at least
30 days following approval of this proposed rule change, and
approximately three months notice of the launch, including technical
documentation related to the proposed trading sessions. The Exchange
believes this is more than sufficient amount of time to allow market
participants to prepare for the new trading sessions.
The SIFMA letter also referenced Reg SHO concerns. Start of day
positions must be accurate to correctly calculate short and long
positions in support of Reg SHO. If clearing firm files, including
contrary assignments, are delayed, start-of-day positions could be
impacted, leading to potential mis-marking or other issues. The
Exchange has discussed this with the OCC and Market Maker clearing
firms, who have generally indicated that their systems complete such
processing on the current trading day. Consequently, the Exchange
understands the proposed GTH start time of 7:30 a.m. ET is not a
concern from the Reg SHO perspective.
Since OPRA and OCC can support the proposed extended trading hours
and other exchanges have access to OPRA lines as well as OCC clearance
and settlement services (meaning they may therefore pursue extended
trading hours if they so choose), the Exchange does not believe that
the proposed rule change will create any burden on intermarket
competition. Additionally, if other exchanges also are open during the
new GTH and Curb sessions, the Exchange will route orders during
overlapping extended trading hours to those exchanges as it currently
does for multi-listed options in RTH and comply with order protection
requirements set forth in the Linkage Plan. This process will not
change, regardless if a company reports earnings or other circumstances
that may result in elevated volatility levels, and this will help
provide protection to investors for order routing. The Exchange does
not believe that the level of competition among options exchanges will
change during RTH because of the introduction of GTH and Curb trading
for equity options. The Exchange also believes the proposed rule change
could increase its competitive position outside of the United States by
providing investors with an additional investment access with respect
to their global trading strategies during times that may correspond
with regular trading hours outside of the United States.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received written comments on the
proposed rule change.
III. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, is consistent with the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f381869f96de909c9e9e969d8780b3809690dd949c85"><span class="__cf_email__" data-cfemail="2a585f464f07494547474f445e596a594f49044d455c">[email protected]</span></a>. Please include
file number SR-CBOE-2025-079 on the subject line.
[[Page 18020]]
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CBOE-2025-079. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-CBOE-2025-079 and should be submitted on
or before April 30, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\59\
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\59\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-06799 Filed 4-8-26; 8:45 am]
BILLING CODE 8011-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.