CBOE Hikes BBO, Depth Fees, Cuts COB Charges

CBOE is increasing the price of its BBO Data Feed of quote and order data from $5,000 per month to $6,000, and is establishing a similar fee of $6,000 for its Book Depth Data Feed, which comprises the data on the BBO feed plus four levels of depth and aggregate size. However, the Book Depth fee is waived for clients of the BBO feed, so firms subscribing to data over the exchange’s CSM (CBOE Streaming Markets) low-latency datafeed mechanism would pay a total of $6,000 per month for all data.

Tom Knorring, vice president of business development and market data sales at CBOE, says the higher fees will support the work required to add more content on the exchange’s auction process to the CSM feed. The auction process occurs when CBOE does not have the best price available, and—before sending it on to the exchange with the best price via the Options Intermarket Linkage plan—sends it to see if any CBOE market makers want to step up to the price. Now, by adding this data to the CSM feed, CBOE will make the information available to all its datafeed subscribers, rather than just market makers, Knorring says.

The monthly fees give clients the right to unlimited internal and external distribution of the data, though the exchange has introduced a $50 per user monthly fee for external end-users that want to view the data on a display-only basis, such as banks’ clients that want to aggregate prices from different markets in a view-only screen.

Extended Hours Feed
In addition, to accompany the introduction of extended overnight trading hours during the European timezone, the exchange is introducing a $500 monthly fee for firms that want access just to trade data from this overnight period without taking data covering US trading hours. Existing subscribers to the US feed will receive the extended hours for free as part of their subscription.

However, the exchange is reducing fees associated with its complex order book business to encourage more trading of spread contracts among retail investors. Although spread trading allows traders to reduce risk, fees for CBOE’s COB (Complex Order Book) Data Feed have been a barrier to attracting more retail traders, Knorring says. As a result, the exchange has eliminated all non-professional end-user fees for the data (previously $1 per user per month), and reduced the data fee paid by brokers to distribute the data from $3,000 per month to $100 per month, which would be waived entirely if the firm already subscribes to the BBO feed.

“We took the [user] price down to zero because we want our spreads business to grow, and we want retail investors to be ‘takers’,” Knorring says. “In the spreads world, retail customers can’t be ‘takers’ because they haven’t seen that data until now. It was available, but we charged a fee… and they didn’t think that was worth it. So now we’re taking away any reason not to subscribe to this,” while reducing the broker fee makes it more attractive for brokers to offer the feed to clients, he adds.