The Chicago Board Options Exchange (CBOE), the world's largest options exchange, today announced that its members voted to implement the second phase of CBOEdirect HyTS, CBOE's unique hybrid trading system. The planned rollout, dubbed HyTS 2.0, is expected to begin in the first quarter of 2004, pending SEC approval.
The proposal passed with 592 votes in favor, 163 votes opposed and 6 abstentions.
"This is the next step forward in our mission to develop the most dynamic trading environment in the options industry. HyTS 2.0 will build on the initial success of hybrid trading at CBOE by enabling a wider range of market participants to access our hybrid system. We expect CBOE members and customers alike to benefit from the increased access and liquidity afforded by HyTS 2.0," said William J. Brodsky, Chairman and CEO of the Chicago Board Options Exchange.
Hybrid 2.0 includes the creation of two new categories of CBOE memberships: electronic Designated Primary Market Makers (e-DPMs) and Remote Market Makers(RMMs), which will give nationally based specialists and market makers the opportunity to quote prices and trade electronically from remote locations. Hybrid 2.0 will also provide for streamlined procedures related to crossing rules and the adoption of a revised fee schedule.
CBOE developed its Hybrid Trading System, CBOEdirect HyTS to further blend the speed and efficiency of electronic trading with the benefits of a floor-based, auction market. CBOEdirect HyTS was launched on June 12, 2003, creating a unique trading model unlike that of any other options exchange.
Currently, there are more than 310 active options classes available for trading via CBOEdirect HyTS, representing approximately 80% of U.S. equity options trading volume. It is expected that at least 600 classes, representing over 90% of U.S. equity options volume, will be available on Hybrid by the end of the first quarter in 2004.