Nasdaq PHLX Moves to Let Assigned Market Makers Join More Options Auctions

Nasdaq PHLX filed on 10 April to change how liquidity can be sourced in several of its electronic options auction mechanisms. In SR-Phlx-2026-22, the exchange proposes removing the current prohibition on soliciting assigned market makers to take the contra side of an initiating order in paired auctions. The change would affect simple and complex versions of PIXL, the Solicited Order Mechanism and the Facilitation Mechanism, as well as related FLEX variants.

The exchange says the goal is to align its electronic auction rules more closely with its open-outcry framework, where floor market makers can already be solicited for liquidity. PHLX argues that letting assigned market makers participate more directly should widen the pool of available responders, increase competition around the initiating order and improve price discovery for agency flow. The filing also includes a smaller clean-up change clarifying that certain immediate-or-cancel orders are rejected rather than routed.

For active options traders, the important point is not the legal wording but the execution effect. If more liquidity providers can compete inside these auction formats, fills for size-sensitive or price-improvement-seeking orders could become more efficient, especially in names where market-maker participation is central to quoted depth.

Why it matters

Auction design has a direct impact on fill quality in listed options. Even technical rule changes can shape who competes for order flow, how much price improvement is available and how confidently traders can work larger orders.

What to watch next

PHLX said it plans to implement the change by or before the third quarter of 2026. Watch whether rival options exchanges follow with similar auction-participation changes or whether commenters push back on information-leakage and fairness concerns.