Exchange Highlights: March Midpoint Madness. Plus: Options Firms Invest in MEMX

March Midpoint Madness. Plus: Options Firms Invest in MEMX

Highlights & Recent Developments

  • MEMX exchange market share was 5.5% in March 2023
  • Many active ETPs and S&P 500 stocks had midpoint liquidity available more than 30% of the trading day
  • MEMX expands investor base with support from leading options firms
  • MEMX comments on SEC equity market structure proposal

Equities Highlights

In March, MEMX exchange market share (excludes TRF volume) was 5.5% and the exchange quoted over 75% of the time at the NBBO in over 1,900 symbols. MEMX ranked 3rd among all exchanges in setting the first and best NBBO prices in 13.7% of instances. MEMX notional market share has improved in 1Q, including better trading and quoting in higher dollar volume securities like SPY, QQQ, and AAPL.

There are significant midpoint opportunities on the MEMX order book. In March, 882 securities had midpoint liquidity available more than 30% of the trading day, including many active ETPs and S&P 500 stocks shown in the table below.

Options Announcement

We recently completed another strategic equity funding round to support the launch of MEMX Options, which included new investors Optiver, Belvedere Strategic Capital, LP, Chicago Trading Company, and IMC, as well as existing investors Citadel Securities and Virtu Financial. The MEMX investor group now includes twenty-two firms, most of which trade both U.S. equities and options.

As a reminder, MEMX plans to begin trading options with a price/time market model on August 7, 2023 in a phased rollout. User acceptance test dates are July 22 and July 29. Specifications are available for download here (under Protocol Specs > US Options). Membership documents are available here.

Market Structure – Equities

MEMX recently submitted our comment letter on U.S. equity market structure reform. The summary table below contrasts our recommendations to the SEC proposals in four key areas: round lot sizes, tick sizes, access fee caps and retail trading.

MEMX has been advocating for sensible, data-driven tick size reform (i.e. $0.005 minimum increment in tick-constrained stocks) since publishing our white paper in August 2021. We’re seeing the industry, including other exchanges, now coalesce around this solution, and hope the Commission will take in all the comments and move forward with a change that can produce meaningful results while limiting unintended consequences.