Cboe Compression Service

Designed in collaboration with Cboe TPHs, the Cboe Compression Service (CCS) provides an efficient and proven mechanism to help TPHs free up regulatory capital associated with SPX and SPXW positions. The service offers important capital relief benefits and operational efficiencies.

Shortly after the end of the regular trading session, participating TPHs upload position information and constraints that specify the risk profile they are willing to accept post-compression. A multilateral network of trades between participating TPHs is created that provides maximum regulatory capital savings subject to the TPH defined constraints. Upon the approval of participating TPHs, all trades are cleared on the day of compression.

Service Overview

Compression service dates are established by the Exchange based on a regular monthly cadence and/or can be run on demand based on TPHs. Compression dates are announced to registered TPH representatives directly.

Firm authorized participants access the CCS through the Cboe Customer Web Portal login. During a post close time window specified in the CCS User Manual, TPHs upload a file specifying positions, risk and cost constraints, and per-position capital relief benefit using a CCS portal application. Risk constraints and capital relief benefit associated with each position are specified using a unit agnostic design that enables each TPH to customize their usage of the compression system to suit their specific business conventions and goals.

At the end of the submission window the system computes a multilateral network of trades that maximizes benefits while satisfying all constraints and presents the firm-specific trade and risk profile information back to participating TPHs. TPHs then have a time window in which to approve or reject the candidate compression trade portfolio.

On unanimous approval during the approval window, trades are automatically cleared and reported on the day of compression.

Additional Information

For information on the Cboe Compression Service operation, usage and registering to use the service, please see the Cboe Compression Service User Manual.

For additional questions regarding the Cboe Compression Service contact your Cboe client services representative.

For additional information or questions on service usage please contact [email protected]