The Chicago Stock Exchange’s (CHX) Matching System trading platform has been designed and constructed to provide fully electronic cost efficient executions. CHX’s trading platform offers US broker-dealers access to a fair, open, and neutral market place with diverse order flow.
The new platform is scalable, reliable, and designed for the messaging rates of today’s equity trading environment. The CHX Matching System performance characteristics meet the requirements for classification as an automated market under Regulation NMS.
Order-sending Participants may route to the CHX Matching System by using the FIX protocol via existing order-sending Participant or vendor connections.
Upon receipt of an order, the CHX Order Management System (OMS) will validate and route orders to the appropriate matching engine instance. Several matching instances will each handle processing for a set of issue symbols, which can be reallocated among matching engines to re-grade processing loads.
Once the matching engine receives an order, the order’s price is compared with resting limit orders in the book. If a match can be consummated at a price within the NBBO, the orders will be executed.
If the execution would occur at a price outside the NBBO or Limit Up-Limit Down (“LULD”) price bands, no execution will occur and the inbound order will be cancelled; provided, however, that such an order may be price slid, pursuant to the attached order modifiers and will not be cancelled. If no match is available, then an inbound order will be placed in the book and immediately quoted. If the order’s price would lock or cross the NBBO or cross the LULD price bands, the order will be cancelled; provided, however, that such an order may be price slid, pursuant to the attached order modifiers and will not be cancelled.
Orders resting in the book will be matched in price - time priority and according to the ranking listed below.
- Display orders
- Un-displayed portions of reserve size orders
- Un-displayed orders
The Matching System matches orders on a share for share basis and inbound odd lot orders can match at prices outside the NBBO.
The CHX Matching System accepts limit orders and market orders marked IOC.
Orders entered for ranking in the book must be Day limit orders for Regular Way Settlement. The Matching System also accepts limit orders marked Reserve Size and Do Not Display. See a listing of Matching System order types and order modifiers.
The CHX Matching System also accepts various cross order types that either execute or, if not executed, are rejected to the sender.
See CHX FIX Interface Specification for more detail regarding acceptable order modifiers.
There are normally four trading sessions during each trading day. The first or Early Session will begin at 6:00 a.m. CT and operate until 8:30 a.m. CT. The second session is the Regular Trading Session and it will begin at 8:30 a.m. CT and end at 3:00 p.m. CT. The third session is the Late Trading Session and it will commence immediately after the close of the Regular Trading Session and will end at 3:15 p.m. CT. The fourth and final trading session is the Late Crossing Session, which operates from 3:15 p.m. CT to 4:00 p.m. CT. Only cross orders (with the exception of the mid-point cross) are eligible for entry or execution in the Late Crossing Session. Market orders are not eligible for entry or execution during the Early or Late Trading Sessions. Unless otherwise designated by a Participant, open orders will carry over from one trading session to the next until the end of the Late Trading Session at 3:15 p.m. CT. For additional details, please refer to Information Memorandum 09-4 (Sept. 15, 2009).
Stocks eligible for trading in the CHX Matching System include securities traded on NYSE, AMEX, NASDAQ, and BATS.