Cboe Global Markets is set to enhance its BZX Options Exchange by introducing complex order functionality effective October 13, 2025, subject to regulatory approval.
The company says the addition marks a significant milestone in its ongoing strategy to deliver uniform, innovative capabilities across all four of its U.S. options exchanges—Cboe Options (C1), C2 Options (C2), EDGX Options (EDGX), and now BZX Options.
“Each of our exchanges has slightly different market structures, pricing models, and technology architectures,” said Anthony Montesano, Head of Derivatives Market Structure at Cboe.
“That differentiation allows us to compete for different segments of order flow and liquidity. Adding complex orders to BZX brings consistency across our platform suite and gives us additional tools to innovate—especially in the way we incentivize and support market participants,” he told Traders Magazine.
BZX operates under a maker/taker, price-time allocation model. According to Montesano, this structure provides both a strategic advantage and room for creative pricing initiatives.
“We think the BZX’s market model allows us to deliver a differentiated complex order experience that’s valuable to both liquidity providers and customers,” he explained.
Once launched, BZX will support complex orders through its Complex Order Book (COB), which will use a price-time priority allocation, and through the Complex Order Auction (COA), which will allocate based on price and pro-rata priority—augmented by a new feature exclusive to BZX: Priority Quoter (PQ) functionality.
The Priority Quoter mechanism is designed to incentivize market makers to maintain top-of-book quotes in the individual legs of a complex order. “If a market maker is on the National Best Bid or Offer (NBBO) on any of the legs of the complex instrument and they respond to a COA, they get priority up to the size of their best quote,” Montesano said.
“This is a very specific and meaningful incentive that we believe will enhance competition and improve pricing outcomes for customers.”
Importantly, COA auction notifications on BZX will not disclose the auction price—mirroring the behavior on C1 and C2. Montesano noted that this approach can drive better execution quality. “There are strong arguments that price-obfuscated auctions encourage more aggressive, theoretically fair pricing from market makers,” he said. “We’ve seen in our data that customers often receive meaningful price improvement in this model.”
The rollout also includes a suite of technical upgrades to support efficient access and integration. Complex order entry will be available through both the industry-standard FIX protocol and Cboe’s proprietary BOEv3 protocol, which has been newly enhanced for BZX. Certification is required but can be completed via self-service through the Customer Web Portal. Firms previously certified on other Cboe options exchanges for FIX will not need to recertify.
To support the new functionality, Cboe is launching updated market data infrastructure, including new multicast groups and rendezvous points for the Complex PITCH, Complex TOP, and Complex Auction feeds. These feeds will begin transmitting heartbeats on September 15, 2025. GRP and SPIN sessions will also be available on that date.
Starting in early August, firms have had access to the full complex order suite in Cboe’s BZX certification environment, with additional weekend testing opportunities scheduled for September 20 and October 11.
Fee code and pricing updates related to complex orders and market data for BZX will be reflected in the BZX Options fee schedule and announced separately.
Montesano emphasized that while the BZX complex order rollout may seem like a narrowly targeted enhancement, it represents a broader Cboe philosophy. “This is part of a much larger initiative to build the tools and infrastructure that our members need,” he said.
“Whether it’s enhancements to our FLEX market, innovations like pairing FLEX and non-FLEX options, or new daily expirations, we’re constantly evolving with our partners.”
Cboe’s recent innovations in the FLEX space have helped power the rapid growth of defined outcome ETFs—many of which rely heavily on custom options execution, he said.
“We’ve introduced order types like Delta-Adjusted-at-Close (DAC) and percent-based FLEX orders, all built in collaboration with the firms that needed them,” Montesano explained. “And we’re not stopping there.”
Another major initiative underway is the planned launch of complex stop-limit order functionality—the first of its kind among U.S. options exchanges. “Retail customers, especially those trading zero-DTE strategies, often rely on complex stop limits that today sit on brokers’ systems,” Montesano said. “We’re building functionality to allow those orders to rest on exchange, because our retail partners asked us to.”
Collaboration with market participants continues to play a central role in how Cboe designs and evolves its market structure. “Our retail partners, ETF issuers, market makers, and institutional clients all play a role in shaping what we build,” said Montesano. “When they tell us what they need, we work with them to design, build, and deploy it in a scalable way.”
As Cboe continues to expand its options infrastructure and capabilities—including growing offerings in cryptocurrency-linked index products and cross-platform protocol enhancements like BOEv3—Montesano said the company’s focus remains on delivering trusted, competitive markets.
“We believe the U.S. derivatives market is the most sophisticated in the world, and Cboe plays a central role in that ecosystem,” he said. “The addition of complex orders on BZX is another example of how we’re strengthening that foundation—offering more choice, more consistency, and more value to our participants.”
