Cboe adopts two-sided quote bid-ask differentials for market-makers

The Securities and Exchange Commission published a notice that Cboe Exchange, Inc. filed a proposed rule change on August 17, 2026, with immediate effectiveness. The amendment revises Exchange Rule 5.52 (Market-Maker Quotes) to adopt two-sided quote bid/ask differentials.

Under the proposal, a Market-Maker's electronic quotes may not exceed a $5 spread for options series expiring in 270 days or less, or a $15 spread for series expiring in more than 270 days. The differential is measured at the Trading Permit Holder firm level, aggregating all Executing Firm IDs used in a given series. A zero or absent bid is treated as a $0 bid for the purpose of the calculation.

The Exchange retains discretion to establish alternative differentials for particular series or classes, including proprietary index options, and exempts in-the-money series when the underlying security's national best bid and offer is wider than the $5 or $15 thresholds. In such cases, the spread may match the underlying NBBO.

The filing is identified as Release No. 34-106208, File No. SR-CBOE-2026-074, and appears in the Federal Register, Volume 91, Number 168 (September 1, 2026), pages 56254-56257, FR Doc No. 2026-17805. The Commission is soliciting comments pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934.

Cboe states the rule change aligns with the Act's Section 6(b) requirements, aiming to promote just and equitable principles of trade, enhance price discovery, and improve market liquidity by preventing excessively wide two-sided quotes.