CBOE Stock Exchange (CBSX)

CBOE

CBOE Stock Exchange (CBSX)

The CBOE Stock Exchange is a fully electronic, anonymous price-time priority trading environment, which runs on CBOE's internally developed trade engine, CBOEdirect.

CBSX launched in 2007 through a partnership between CBOE and four liquidity-providing firms, one of which was Interactive Brokers Group. The exchange was designed to increase speed and efficiency and reduce execution costs for market participants trading stock and options combination orders.

CBSX operates a taker-maker pricing structure, with rich rebates to remove liquidity. This inverted pay model was designed to attract greater broker-dealer order flow.

Each security traded on CBSX is assigned a Designated Primary Market Maker (DPM). DPMs are obligated to quote continuous, 2-sided markets, but differ from traditional Specialist roles because DPMs do not act as agents on behalf of orders. CBSX also offers a Remote Market Maker (RMM) program, adding to the liquidity pool.

CBSX trades are cleared by the OCC.