From the September 01, 2009 issue of Futures Magazine • Subscribe!

Box goes taker maker

For years the Boston Options Exchange proudly declared that they would not participate in the common practice of payment for order flow, unique among U.S. options exchanges. However, in August, Box announced a change in fee structure where, upon SEC approval, they will implement a surcharge on all non-penny pilot classes where the taker of liquidity in a transaction will receive 30¢ (regardless of account type) and the liquidity maker will pay 30¢. The fee structure does not apply to PIP (price improvement period) orders, which Box senior vice president Alan Grigoletto referred as a “fee free zone.”

The structure is the opposite of the better-known maker taker model where those traders adding to liquidity by placing orders in the market are paid by those simply hitting bids or lifting offers.

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