Cboe BZX adopts $5 bid-ask differential rule for market makers
Effective immediately, the rule requires BZX market makers to keep bid-ask spreads within $5, with limited exceptions for certain series.
On August 27, 2026, the Securities and Exchange Commission published notice SR-CboeBZX-2026-067 (Release No. 34-106206; FR Doc No. 2026-17803) that Cboe BZX Exchange, Inc. filed a proposed rule change on August 17, 2026. The amendment adds to Exchange Rule 22.6(c) a general maximum bid/ask differential of $5 for market makers' electronic quotes in any appointed options class.
The proposed differential is measured at the Options Member firm level, aggregating all quotes entered across the firm's executing-firm IDs for a given series. A zero or no bid is treated as a $0 bid for the purpose of the calculation. The Exchange may, under Rule 22.6(c)(1), establish wider differentials for specific series or classes, and Rule 22.6(c)(2) exempts in-the-money series where the underlying security's NBBO spread exceeds the $5 limit.
The Exchange asserts that the change is consistent with Section 6(b)(5) of the Securities Exchange Act and is intended to promote just and equitable trading principles, improve price discovery, and prevent excessively wide quotes that provide little liquidity. The filing is available on the SEC and Cboe websites, and comments are being solicited from interested parties.
The amendment becomes effective immediately upon filing, binding all market makers on the Cboe BZX Exchange to the new bid/ask differential requirements, subject to the stated exceptions.
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