Cboe Global Markets

Cboe Compression Service

Designed in collaboration with Cboe TPHs, the Cboe Compression Service frees up capital ultimately providing for deeper liquidity and more efficient markets. The service provides Cboe Options Exchange (C1) TPHs with the opportunity to reduce position open interest while maintaining an acceptable portfolio risk exposure.

Two methods of position compression are available:

Multilateral compression
the system computes and after TPH approval automatically executes a portfolio of trades that maximizes compression among the participating TPHs
Bilateral compression
counterparty match data of offsetting positions is provided to TPHs that opt-in, which is used to bilaterally consummate trades (no trades are automatically executed)

How to Participate

Register for access by contacting Membership Services.

Eligibility requirements for multilateral (not for bilateral) necessitate profile information used for clearing trades resulting from a unanimously approved multilateral compression portfolio. In addition, certification is necessary to participate in multilateral compression.

Service Overview

Compression service dates will be established by the Exchange and communicated via Trade Desk Notice.

This service is accessed via the Cboe Customer Web Portal. From there, users submit files that specify positions for compression including the capital reduction benefit associated with closing contracts of each submitted position, and edge and risk constraints on the portfolio of compression trades they are willing to accept.

At the time of file upload, TPHs opt-in to multilateral compression, match data service (bilateral), or both. Execution reports and/or drop copies for multilateral compression trades will be sent via FIX to interested parties, and will be published via PITCH, TOP, and OPRA.

View the Compression Service User Manual.

FAQs

Defining Markets with Customer Feedback

Cboe strives to provide traders with tools and services to better help them manage their trading activities. Please contact [email protected] with service design questions, future functionality requests, or for information on the Cboe roadmap for capital efficiency related products and services.