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Notice
ASX participants, vendors and users were advised of proposed changes to Equity Options traded on ASX Trade via Market Notice 1344.25.10 with an option to provide feedback to ASX for consideration. The proposals focused on updates to the ETO Trade Cancellation policy as well as adjustments to ASX’s policy for setting Special Size (Block) thresholds.
ASX received responses from a broad range of stakeholders, including 5 ETO Market Makers, 4 Investment Banks, 1 Institutional broker, 2 Fund Managers and 1 industry body representing 14 Retail Brokers.
The following summary of feedback has been broken into market segment type:
Participant Type |
Consultation item 1(a): ETO Trade Cancellation · Underlying hedging instrument not available |
Consultation item 1(b): ETO Trade Cancellation · Ratio TMCs |
Consultation item 2: Special Size (Block) Trade reporting size of ETOs |
Market Makers |
Supportive One suggested modification (start policy from 4pm – during closing auction to allow for expiry-day trading). |
Supportive |
Against Most opposed to lowering Special Size thresholds, citing risks of reduced competition, loss of liquidity incentives, and flow shifting to institutional participants; advocate for higher caps and structural adjustments to protect market-making viability. |
IBs / Insto Broker |
Supportive Believe this change is beneficial to the market. |
Supportive No concerns raised. |
Supportive Support lowering thresholds. Would like levels to be lower than those proposed. |
Retail brokers |
Supportive |
Supportive |
Supportive Emphasized rounding the number of contracts for simplicity and strongly endorse notional caps to address mechanical issues from equity price appreciation. |
Buyside |
Neutral |
Neutral |
Supportive Cited improved liquidity, trading velocity, and execution efficiency as key benefits of lowering thresholds. |
ASX has reviewed the responses and determined the following action:
- Consultation item 1(a) and 1(b) covering ETO cancellation ranges will both be implemented.
- Consultation item 2 on Special Size (Block) levels for Single Stock will be implemented with a 12-month review period to assess the impact and consider any necessary adjustments. ASX will also round the calculated number of contracts to simplify the amount of different thresholds across ETO Classes.
The timing for these changes will be set and communicated to the market in early 2026 via market notice.
What do I need to do by when?
ETO users should review the implementation schedule when released in early 2026.
If you would like to discuss the market feedback in further detail, please contact Gregory Pill to arrange a suitable time.
Need more information?
Issued by
Gregory Pill
Head of Equity Derivative Products & Multi Asset Market Making
Contact information
Gregory Pill