Nasdaq ISE files rule change to allow wider complex order ratios

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Nasdaq ISE rule change for complex orders

Highlights

Nasdaq ISE filed a rule change on June 3, 2026, proposing to allow wider conforming and non-conforming ratios in complex order execution.
The proposal permits ratios outside the current one-to-three and three-to-one limits for Complex Options Strategies and above the eight-to-one limit for Stock-Option and Stock-Complex Strategies.
Non-conforming ratio complex orders will be initially available only in limited auctions with ongoing assessment before any broader rollout, while maintaining protections for Public Customer Order interest.

Rule filing broadens complex order execution

As detailed in a notice from the Securities and Exchange Commission, the exchange submits the proposal on June 3, 2026, and the regulator is publishing it to solicit comments from interested parties. The filing covers trading on the Complex Order Book as well as certain auctions where Nasdaq ISE wants to permit both conforming and non-conforming ratios.

Under current rules, the exchange permits Complex Options Strategies only when the ratio between options components is at least one-to-three and no more than three-to-one. For Stock-Option Strategies and Stock-Complex Strategies, the current limit is a ratio no greater than eight-to-one, measured by the total units of the underlying stock or convertible security in the option leg or legs against those in the stock leg.

The proposal also includes new definitions for conforming and non-conforming ratios, updates to rule cross-references, and minimum increment standards for Complex Options Strategies, Stock-Option Strategies, and Stock-Complex Strategies that use non-conforming ratios.

Market access and customer protection focus

Nasdaq ISE says the change is intended to provide another electronic venue for non-conforming Complex Orders, which may improve execution efficiency for strategies that do not fit within the existing three-to-one framework. The exchange says broader ratio flexibility could increase execution opportunities for market participants using more tailored options structures.

The exchange is initially offering non-conforming ratios only in limited auctions and says it will assess demand from member organizations before deciding whether to extend the feature to additional auctions. At the same time, the filing says the structure is designed to preserve protections for Public Customer Order interest on the single-leg order book while allowing ratios greater than three-to-one or less than one-to-three in complex strategies.

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