Self-Regulatory Organizations; Nasdaq Texas, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Various NTX Options Rules

SECURITIES AND EXCHANGE COMMISSION [Release No. 34-106002; File No. SR-NasdaqTX-2026-033] Self-Regulatory Organizations; Nasdaq Texas, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Various NTX Options Rules July 28, 2026. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder;  2 notice is hereby given that July 14, 2026, Nasdaq Texas, LLC (“Nasdaq Texas” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1  15 U.S.C. 78s(b)(1). 2  17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend various NTX Options rules. Specifically, the Exchange proposes to amend rules at Options 1, Section 1, Definitions; Options 2: Section 3, Lead Market Maker Allocations, Section 4, Obligations of Market Makers and Lead Market Makers, and Section 6, Market Maker Orders; Options 3: Section 7, Types of Orders and Order and Quote Protocols; Section 8, Options Opening Process; Section 9, Trading Halts; Section 10, Order Book Allocation; Section 15, Risk Protections; Section 20, Nullification and Adjustment of Options Transactions including Obvious Errors; and Section 22, Limitations on Order Entry. The Exchange also proposes to amend Options 5, Section 4, Order Routing; Options 6, Section 1, Authorization to Give-Up; and Options 7, Section 1, General Provisions. The text of the proposed rule change is available on the Exchange's website at https://listingcenter.nasdaq.com/rulebook/nasdaqtx/rulefilings, and at the principal office of the Exchange. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NTX Options proposes to amend various rules to align its functionality to that of other Nasdaq affiliated options exchanges. The Exchange proposes various changes to harmonize the Exchange's rules where appropriate with the rules of its affiliated options exchanges. Specifically, the Exchange proposes to adopt rules similar to Nasdaq ISE, LLC (“ISE”), Nasdaq GEMX, LLC (“GEMX”), Nasdaq MRX, LLC (“MRX”), and Nasdaq Phlx LLC (“Phlx”). The Exchange proposes to add a definition for a Lead Market Maker in Options 1, Section 1 (Definitions) and define “LMM” in Options 2, Section 3 (Lead Market Maker Allocations). The Exchange proposes to adopt order types at Options 3, Section 7 (Types of Orders and Order and Quote Protocols) that are identical to ISE, GEMX, MRX and Phlx. The Exchange proposes to adopt a new Stop Order, Stop Limit Order, Reserve Order and Good-Till-Date Order identical to ISE, GEMX, MRX and Phlx. The Exchange would remove the Minimum Quantity Order. The Exchange would also amend Options 2, Section 6 (Market Maker Orders), Options 3, Section 8 (Opening and Halt Cross), Options 3, Section 9 (Trading Halts), Options 3, Section 10 (Order Book Allocation), Options 3, Section 20 (Nullification and Adjustment of Options Transactions including Obvious Errors), and Options 3, Section 22 (Limitations on Order Entry) to account for new order types. These proposed changes would be identical to corresponding rules on ISE, GEMX, MRX and Phlx at Options 2, Section 6, Options 3, Section 8, Options 3, Section 9, Options 3, Section 10, Options 3, Section 22 and Phlx Options 3, Section 20. The Exchange proposes to amend its Optional Risk Protection at Options 3, Section 28 to make it identical to ISE, GEMX, MRX and Phlx. This amendment does not substantively change the functionality of the risk protections. Options 1, Section 1 and Options 2, Section 3 The Exchange proposes to define the term “Lead Market Maker” at Options 1, Section 1(a)(25) to mean a Market Maker who is registered as an options Lead Market Maker pursuant to Options 2, Section 3. This definition will provide guidance to Members about where to locate information concerning Lead Market Makers. The remainder of the definitions will be renumbered accordingly. The Exchange also proposes to amend current Options 1, Section 1(a)(45) which describes the term “out-of-the-money” to remove the final sentence which states, “This definition shall only apply for purposes of Market Maker quoting obligations in Options 2, Section 5.” The Exchange is removing this sentence as the term applies to all Options Rules and not only Options 2, Section 5. The Exchange proposes to amend Options 2, Section 3, Lead Market Maker Allocations, to remove “LMM” in Options 2, Section 3A and instead state “Lead Market Maker.” The Exchange would define an “LMM” in Options 2, Section 3A(a). Options 2, Section 6 Options 2, Section 6(a) currently states that Market Makers may enter all order types defined in Options 3, Section 7 in the options classes to which they are appointed and non-appointed, except for Customer Cross Orders. The Exchange proposes to adopt a new Reserve Order at proposed Options 3, Section 7(g) that is identical to ISE, GEMX, MRX and Phlx Reserve Orders at Options 3, Section 7(g). The Exchange proposes to amend Options 2, Section 6(a) to restrict Market Makers from entering Reserve Orders in both appointed and non-appointed options classes. Today, ISE, GEMX, MRX and Phlx Options 2, Section 6 restricts Market Makers from entering Reserve Orders. Unlike other order types, the Reserve Order is a limit order that contains both a displayed portion and a non-displayed portion. Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders. When the displayed portion of a Reserve Order is decremented, either in full or in part, it shall be refreshed from the non-displayed portion of the resting Reserve Order. The Exchange believes that because a Reserve Order contains a non-displayed portion, Market Makers should not be permitted to enter this order type. Market Makers are required to make markets that, absent a change in market conditions, will be honored for the number of contracts entered into the Exchange's System in all series of options classes to which the market maker is appointed. The Exchange believes that Market Maker liquidity should be displayed liquidity. Options 3, Section 7 The Exchange proposes to remove “(a)” and move the rule text of Options 3, Section 7(a) after the first sentence. Market Orders The Exchange proposes to amend the description of Market Orders and relocate the order type from Options 3, Section 7(a)(5) to Options 3, Section 7(a) without any substantive change to the rule. Today, Options 3, Section 7(a)(5) states, A Market Order is an order to buy or sell at the best price available at the time of execution. Participants can designate that their Market Orders not executed after a pre-established period of time, as established by the Exchange, will be cancelled back to the Participant, once an option series has opened for trading. Market Orders on the Order Book would be immediately cancelled if an options series halted, provided the Participant designated the cancellation of Market Orders. The Exchange proposes to instead provide that, A Market Order is an order to buy or sell a stated number of options contracts that is to be executed at the best price obtainable when the order reaches the Exchange. Participants can designate that their Market Orders not executed after a pre-established period of time, as established by the Exchange, will be cancelled back to the Participant, once an options series has opened for trading. Market Orders on the order book would be immediately cancelled if an options series is halted, provided the Participant designated the cancellation of Market Orders. The Exchange's amendment to the first sentence does not substantively amend this order type, rather the text is being reworded to align with ISE, GEMX, MRX and Phlx rule text at Options 3, Section 7(a). Limit Orders The Exchange proposes to amend and relocate “Limit Orders” from current Options 3, Section 7(a)(3) to proposed Options 3, Section 7(b). Today, Options 3, Section 7(a)(3) states, “Limit Order” is an order to buy or sell an option at a specified price or better. A marketable Limit Order is a Limit Order to buy (sell) at or above (below) the best offer (bid) on the Exchange. The Exchange proposes to slightly modify the text in a non-substantive manner to align to ISE, GEMX, MRX and Phlx Options 3, Section 7(b) with respect to the description of a Limit Order and a Marketable Limit Order to provide at proposed Options 3, Section 7(b) that a Limit Order is an order to buy or sell a stated number of options contracts at a specified price or better. The Exchange proposes to state at Options 3, Section 7(b)(1) that a Marketable Limit Order is a limit order to buy (sell) at or above (below) the best offer (bid) on the Exchange. The Exchange proposes to define a Fill-or-Kill Order as a Limit Order that is to be executed in its entirety as soon as it is received and, if not so executed, treated as cancelled, similar to ISE, GEMX, MRX and Phlx Options 3, Section 7(b)(2). The Exchange proposes to amend and relocate the Intermarket Sweep Order from current Options 3, Section 7(a)(6) to proposed Options 3, Section 7(b)(3) under Limit Orders. Current Options 3, Section 7(a)(6) states. “Intermarket Sweep Order” or “ISO” is a Limit Order that meets the requirements of Options 5, Section 1(8). Orders submitted to the Exchange as ISO are not routable and will ignore the ABBO and trade at allowable prices on the Exchange. ISOs may be entered on the Order Book or into the PRISM Mechanism pursuant to Options 3, Section 13(ii)(K). ISOs must have a time-in-force designation of Immediate-or-Cancel. ISO Orders may not be submitted during the opening. The rule text is substantively identical, except that the Exchange is removing the sentence that states, “ISOs may be entered on the Order Book or into the PRISM Mechanism pursuant to Options 3, Section 13(ii)(K).” The PRISM rule at Options 3, Section 13(ii)(K) describes the use of an ISO in the PRISM Mechanism. All-or-None Orders The Exchange proposes to amend and relocate the All-or-None Orders or “AON” Orders from current Options 3, Section 7(a)(7) to proposed Options 3, Section 7(c). Current Options 3, Section 7(a)(7) provides that an “All-or-None Order” is a Market or Limit Order which is to be executed in its entirety or not at all. All-or-None Orders are treated as having a time-in-force designation of Immediate or Cancel. All-or-None Orders received prior to the Opening Process or after market close will be rejected. The Exchange proposes to add a new sentence which states that AON Orders will only execute against multiple, aggregated orders if the executions would occur simultaneously. This is true for NTX Options today. The handling of AONs as described in the proposed rule text in Options 3, Section 7(c) is consistent with the Exchange's allocation methodology in Options 3, Section 10. The additional detail makes clear that because of the size contingency of AON Orders, those orders must be satisfied simultaneously to avoid any priority conflict on the order book, which considers current displayed NBBO prices to avoid locked and crossed markets as well as trade-throughs. Additionally, the rule text will be harmonized to ISE, GEMX, MRX and Phlx Options 3, Section 7(c). The Exchange also proposes to amend the sentence that states, “All-or-None Orders received prior to the Opening Process or after market close will be rejected” to harmonize the rule text to ISE, GEMX, MRX and Phlx Options 3, Section 7(c). The Exchange proposes to modify this sentence to instead provide that AON Orders may not be submitted during the Opening Process. 3 The current rule text similarly prohibits the submission of AON Orders before the market opens, which occurs at the end of the Opening Process. 3  NTX Options' Opening Process is described in Options 3, Section 8. Stop Orders The Exchange proposes to adopt a Stop Order on NTX Options at proposed Options 3, Section 7(d). The Exchange proposes to describe a Stop Order as an order that becomes a Market Order when the stop price is elected. A Stop Order to buy is elected when the option is bid or trades on the Exchange at, or above, the specified stop price. A Stop Order to sell is elected when the option is offered or trades on the Exchange at, or below, the specified stop price. A Stop Order shall be cancelled if it is immediately electable upon receipt. Stop Orders may only be entered through FIX. A Stop Order shall not be elected by a trade that is reported late or out of sequence. 4 4  ISE and MRX Options 3, Section 7(c) also provide that a Stop Order is not elected by a Complex Order trading with another Complex Order. NTX Options does not offer complex orders, therefore it is not adding that sentence. The Exchange also proposes to adopt a Stop Limit Order at proposed Options 3, Section 7(e). The Exchange proposes to provide that a Stop Limit Order is an order that becomes a Limit Order when the stop price is elected. A Stop Limit Order to buy is elected when the option is bid or trades on the Exchange at, or above, the specified stop price. A Stop Limit Order to sell becomes a sell limit order when the option is offered or trades on the Exchange at, or below, the specified stop price. A Stop Limit Order shall be cancelled if it is immediately electable upon receipt. Stop Limit Orders may only be entered through FIX. A Stop Limit Order shall not be elected by a trade that is reported late or out of sequence. A Stop Order is not elected by a trade that is reported late to ensure systemically that a Stop Order would be elected on the Exchange by the execution price at the actual time of the execution, instead of at a later time. Absent this provision, it would be possible for a Stop Order to be elected by a trade that is reported late, which could result in such Stop Order being converted into a Market Order or a Limit Order and, in the case of a Stop Order executed at a significantly different price than the election price of the Stop Order. 5 5  For example, if a Stop Order to sell at $3.00 is elected by a trade reported late or out-of-sequence with an execution price of $3.00 when the actual bid price at the time of the report is $1.00, the Stop Order would be converted into a market order and executed at $1.00. Cancel or Replace Orders The Exchange proposes to rename a “Cancel-and Replacement Order” to a “Cancel and Replace Order” and amend and relocate the description from Options 3, Section 7(a)(1) to proposed Options 3, Section 7(f). Currently, Options 3, Section 7(a)(1) states, “Cancel-Replacement Order” is a single message for the immediate cancellation of a previously received order and the replacement of that order with a new order with new terms and conditions. If the previously placed order is already filled partially or in its entirety, the replacement order is automatically canceled or reduced by the number of contracts that were executed. The replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended, and the size is not increased. If the replacement portion of a Cancel-Replacement Order does not satisfy the System's price or other reasonability checks ( e.g., Order Price Protection and Market Order Spread Protection within Options 3, Section 15(a)(1) and (a)(2), respectively); the existing order shall be cancelled and not replaced. The new Cancel and Replace Order will mirror the functionality on ISE, GEMX, MRX and Phlx at Options 3, Section 7(f) by stating, Cancel and Replace Orders shall mean a single message for the immediate cancellation of a previously received order and the replacement of that order with a new order. If the previously placed order is already filled partially or in its entirety, the replacement order is automatically canceled or reduced by the number of contracts that were executed. The replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended or size is not increased. In the case of Reserve Orders, the replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended or size (displayed and non-displayed) is not changed. If the replacement portion of a Cancel Replace Order does not satisfy the System's price or other reasonability checks ( e.g., Order Price Protection and Market Order Spread Protection within Options 3, Section 15(a)(1) and (a)(2), respectively); the existing order shall be cancelled and not replaced. The Exchange is not proposing to substantively amend the description of the renamed Cancel and Replace Order, except that the Exchange proposes to introduce Reserve Orders, as explained below, and add a sentence to describe how the System would handle Reserve Orders. The Exchange proposes to state that in the case of Reserve Orders, the replacement order will retain the priority of the cancelled order, if the order posts to the Order Book, provided the price is not amended or size (displayed and non-displayed) is not changed. Because a Reserve Order has both a displayed and non-displayed portion, this additional language makes clear the System handling for this order type. Reserve Orders The Exchange proposes to adopt a Reserve Order at Options 3, Section 7(g) that is identical to the order type in ISE, GEMX, MRX and Phlx Options 3, Section 7(g). As proposed, a Reserve Order would be a limit order that contains both a displayed portion and a non-displayed portion. Both the displayed and non-displayed portions of a Reserve Order would be available for potential execution against incoming marketable orders. A non-marketable Reserve Order would rest on the order book. The displayed portion of a Reserve Order would be ranked at the specified limit price and the time of order entry. The displayed portion of a Reserve Order would trade in accordance with Options 3, Section 10(a)(1)(A) for Public Customer Orders, and Options 3, Section 10(a)(1)(F) for non-Public Customer Orders. Reserve Orders would be entered with an instruction for the displayed portion of the order to be refreshed: (A) upon full execution of the displayed portion or upon any partial execution; and (B) up to the initial size of the displayed portion or with a random refresh quantity within a range determined by the Participant. When the displayed portion of a Reserve Order is decremented, either in full or in part, it would be refreshed from the non-displayed portion of the resting Reserve Order. If the displayed portion is refreshed in part, the new displayed portion would include the previously displayed portion. Upon any refresh, the entire displayed portion would be ranked at the specified limit price and obtain a new time stamp, i.e., the time that the new displayed portion of the order was refreshed. The new displayed portion would trade in accordance with Options 3, Section 10(a)(1)(C)(1)(a) and 10(a)(1)(C)(2)(i) for Public Customer Orders, and Options 3, Section 10(a)(1)(C)(1)(d) and 10(a)(1)(C)(2)(iv) and (v) for non-Public Customer Orders. The initial non-displayed portion of a Reserve Order rests on the order book and would be ranked based on the specified limit price and time of order entry. Thereafter, non-displayed portions, if any, always obtain the same time stamp as that of the new displayed portion as described in proposed Options 3, Section 7(g)(5). The non-displayed portion of any Reserve Order would be available for execution only after all displayed interest has been executed. The non-displayed portion of any Reserve Order would trade in accordance with Options 3, Section 10(a)(1)(C)(1)(a) and 10(a)(1)(C)(2)(i) for Public Customer Orders, and Options 3, Section 10(a)(1)(C)(1)(d) and 10(a)(1)(C)(2)(iv) and (v) for non-Public Customer Orders. The Exchange believes that the adoption of this new order type will allow all Participants the ability to trade their orders with displayed and non-displayed portions similar to ISE, GEMX, MRX and Phlx Options 3, Section 7(g). Customer Cross Order NTX Options at Options 3, Section 12(a) describes a Customer Cross Order. Similar to ISE, GEMX, MRX and Phlx Options 3, Section 7(i), the Exchange proposes to note this order at NTX Options at Options 3, Section 7(i) and state that a Customer Cross Order is comprised of a Priority Customer Order to buy and a Priority Customer Order to sell at the same price and for the same quantity. Such orders will trade in accordance with Options 3, Section 12(a). Add Liquidity Orders The Exchange proposes to relocate the Add Liquidity Order (“ALO”) from current Options 3, Section 7(a)(12)  6 to proposed Options 3, Section 7(n) and add the following sentence to the description, “Add Liquidity Orders may only have a time-in-force designation of Day.” 6  Current NTX Options at Options 3, Section 7(a)(12) states that an “Add Liquidity Order” is a Limit Order that is to be executed in whole or in part on the Exchange (i) only after being displayed on the Exchange's Limit Order Book; and (ii) without routing any portion of the order to another market center. Participants may specify whether an Add Liquidity Order shall be cancelled or re-priced to the minimum price variation above the national best bid price (for sell orders) or below the national best offer price (for buy orders) if, at the time of entry, the order (i) is executable on the Exchange; or (ii) the order is not executable on the Exchange but would lock or cross the national best bid or offer. If at the time of entry, an Add Liquidity Order would lock or cross one or more non-displayed orders or quotes on the Exchange, the Add Liquidity Order shall be cancelled or re-priced to the minimum price variation above the best non-displayed bid price (for sell orders) or below the best non-displayed offer price (for buy orders). Notwithstanding the aforementioned, if an Add Liquidity Order would not lock or cross an order or quote on the System but would lock or cross the NBBO, the order will be handled pursuant to Options 3, Section 5(d). An Add Liquidity Order will be ranked in the Exchange's Limit Order Book in accordance with Options 3, Section 10. Add Liquidity Orders may only be submitted when an options series is open for trading. Today, Add Liquidity Orders may only have a time-in-force designation of Day, 7 so they would rest on the order book in the event that the order could not execute. Requiring Add Liquidity Orders to be entered only as Day Orders is consistent with the Act because an Add Liquidity Order may not remove liquidity from the order book. The Add Liquidity Order is designed to encourage displayed liquidity and offer Participants greater flexibility to post liquidity on the Exchange. Therefore, limiting the time-in-force is consistent with removing impediments to and perfecting the mechanisms of a free and open market and a national market system as there would be no logical outcome for an Add Liquidity Order to have a Time-in-Force of Immediate-or-Cancel. 8 Currently, Options 3, Section 7(n) states that Add Liquidity Orders may only be submitted when an options series is open for trading, therefore a Time-In-Force of “OPG” is not permissible. 9 Finally, with respect to a Time-in-Force of Good-Till-Date  10 or Good-Till-Canceled, 11 these Time-in-Force designations if permitted to be entered may persist into the next trading day if the orders did not execute and, as a result, would participate in the Opening Process. Because Add Liquidity Orders may not participate in the Opening Process as noted in Options 3, Section 7(n), the Exchange proposes not to permit an Add Liquidity Order with a Time-in-Force of GTD or GTC. The proposed text represents current System functionality. Additionally, the Exchange's proposal would harmonize NTX Options' Add Liquidity Order to that of The Nasdaq Options Market LLC (“NOM”) in that NOM's Add Liquidity Order may only have a Time-in-Force of Day. 12 7  A Time in Force designation of Day is described as an order to buy or sell entered with a TIF of “DAY,” which, if not executed, expires at the end of the day on which it was entered. All orders by their terms are Day orders unless otherwise specified. Day orders may be entered through FIX or OTTO. See proposed Supplementary Material .02(a) to Options 3, Section 7. 8  A Time in Force designation of Immediate-or-Cancel is described as an order entered with a TIF of “IOC” that is to be executed in whole or in part upon receipt. Any portion not so executed is to be treated as cancelled. See proposed Supplementary Material .02(d) to Options 3, Section 7. 9  An Opening Only (“OPG”) order is entered with a TIF of “OPG.” This order can only be executed in the Opening Process pursuant to Options 3, Section 8. Any portion of the order that is not executed during the Opening Process is cancelled. OPG orders may not route. This order type is not subject to any protections listed in Options 3, Section 15, except Size Limitation and Market Wide Risk Protection. See proposed Supplementary Material .02(e) to Options 3, Section 7. 10  An order to buy or sell entered with a TIF of “GTD,” which, if not executed, will be cancelled at the sooner of the end of the expiration date assigned to the order, or the expiration of the series; provided, however, that GTD orders will be canceled in the event of a corporate action that results in an adjustment to the terms of an option contract. GTD orders may be entered through FIX. See proposed Supplementary Material .02(c) to Options 3, Section 7. 11  An order to buy or sell entered with a TIF of “GTC” that remains in force until the order is filled, canceled or the option contract expires; provided, however, that GTC orders will be canceled in the event of a corporate action that results in an adjustment to the terms of an option contract. GTC orders may be entered through FIX. See proposed Supplementary Material .02(b) to Options 3, Section 7. 12   See NOM Options 3, Section 7(a)(9). Opening Sweep The Exchange proposes to relocate the Opening Sweep order type from current Options 3, Section 7(a)(8) to proposed Options 3, Section 7(b)(6)  13 without change. 13  Current NTX Options at Options 3, Section 7(a)(8) provides, “Opening Sweep” is a one-sided order entered by a Market Maker through SQF for execution against eligible interest in the System during the Opening Process. This order type is not subject to any protections listed in Options 3, Section 15, except for Automated Quotation Adjustments and Market Wide Risk Protection. The Opening Sweep will only participate in the Opening Process pursuant to Options 3, Section 8 and will be cancelled upon the open if not executed. Block Order The Exchange proposes to relocate Block Order from current Options 3, Section 7(a)(11)  14 to proposed Options 3, Section 7(u) without any substantive change. The Exchange proposes to capitalize the term “Block Order.” 14  Current NTX Options at Options 3, Section 7(a)(9) provides Block Order. A Block Order is an order entered into the Block Order Mechanism as described in Options 3, Section 11(a). PRISM Order The Exchange proposes to relocate the description of a PRISM Order from current Options 3, Section 7(a)(9)  15 to proposed Options 3, Section 7(y) without substantive change. 15  Current NTX Options at Options 3, Section 7(a)(8) provides that a “PRISM Order” is as described in Options 3, Section 13. The Exchange is adding an italicized header to each order type to conform the format to that of ISE, GEMX, MRX and Phlx Options 3, Section 7. Also, the Exchange proposes to reserve the section where NTX Options does not have a similar order type to those in ISE, GEMX, MRX and Phlx Options 3, Section 7. The Exchange is reserving Supplementary Material .01 to Options 3, Section 7 because NTX Options does not offer Qualified Contingent Cross Orders and ISE, GEMX, MRX and Phlx Supplementary Material .01 to Options 3, Section 7 describe a “qualified contingent trade” in that rule. Time in Force Provisions The Exchange proposes to relocate the rule text concerning Time in Force from current Options 3, Section 7(b)  16 to Supplementary Material .02 to Options 3, Section 7 without change. 16  Current NTX Options at Options 3, Section 7(b) states, The term “Time in Force” or “TIF” shall mean the period of time that the System will hold an order for potential execution, and shall include:. Day Order The Exchange proposes to relocate Day Order from current Options 3, Section 7(b)(3)  17 to proposed Supplementary Material .02(a) to Options 3, Section 7 without substantive change. The minor proposed wording changes to the rule text of Day Order are intended to mirror the text in ISE, GEMX, MRX and Phlx Supplementary Material .02(a) to Options 3, Section 7. NTX Options does not have a Precise protocol. 18 17  Current NTX Options at Options 3, Section 7(b)(3) states, “DAY” is an order entered with a TIF of “Day” that expires at the end of the day on which it was entered, if not executed. All orders by their terms are Day Orders unless otherwise specified. Day orders may be entered through FIX. 18  NTX Options adopted an OTTO protocol. See Securities Exchange Act Release No. 101743 (November 25, 2024), 89 FR 95321 (December 2, 2024) (SR-NTX Options-2024-048) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Adopt an OTTO Protocol). This rule change is effective but not yet operative. Good-Till-Canceled The Exchange proposes to rename “Good Til Cancelled” to “Good-Till-Canceled” and amend and relocate the description from Options 3, Section 7(b)(4)  19 to proposed Supplementary Material .02(b) to Options 3, Section 7. The Exchange is not amending the System functionality of this order type. The Exchange proposes to amend the current rule text to instead provide that an order to buy or sell entered with a TIF of “GTC” remains in force until the order is filled, canceled or the option contract expires; provided, however, that GTC orders will be canceled in the event of a corporate action that results in an adjustment to the terms of an option contract. The first sentence of the current text is simply worded differently; today GTC orders are canceled in the event of a corporate action that results in an adjustment to the terms of an option contract. The Exchange is adding this rule text concerning a corporate action to clarify the current System behavior. The proposed GTC description is identical to the rule text in ISE, GEMX, MRX and Phlx Supplementary Material .02(b) to Options 3, Section 7. 19  Current NTX Options at Options 3, Section 7(b)(4) states “Good Til Cancelled” or “GTC” is an order entered with a TIF of “GTC” that, if not fully executed, will remain available for potential display and/or execution unless cancelled by the entering party, or until the option expires, whichever comes first. GTC Orders shall be available for entry from the time prior to market open specified by the Exchange until market close. Good-Till-Date The Exchange proposes to adopt a new TIF designation, Good-Till-Date or “GTD” at Supplementary Material .02(c) to Options 3, Section 7 which is identical to ISE, GEMX, MRX and Phlx's Good-Till-Date TIF at Supplementary Material .02(c) to Options 3, Section 7. A Good-Till-Date TIF is an order to buy or sell entered with a TIF of “GTD,” which, if not executed, would be cancelled at the sooner of the end of the expiration date assigned to the order, or the expiration of the series; provided, however, that GTD orders would be canceled in the event of a corporate action that results in an adjustment to the terms of an option contract. GTD Orders will only be available on FIX, similar to ISE, GEMX, MRX and Phlx Supplementary Material .02(c) to Options 3, Section 7. The Exchange believes this additional TIF will provide Participants with additional opportunities when trading on NTX Options. Immediate-or-Cancel The Exchange proposes to relocate Immediate-or-Cancel from Options 3, Section 7(c)(2)  20 to Supplementary Material .02(d) to Options 3, Section 7 with minor non-substantive wording amendments that are intended to align with rule text in ISE, GEMX, MRX and Phlx Supplementary Material .02(d) to Options 3, Section 7. 20  Current NTX Options at Options 3, Section 7(b)(2) states (d) “Immediate-or-Cancel” or “IOC” is a Market Order or Limit Order to be executed in whole or in part upon receipt. Any portion not so executed is cancelled. (A) Orders entered with a TIF of IOC are not eligible for routing. (B) IOC orders may be entered through FIX or SQF, provided that an IOC Order entered by a Market Maker through SQF is not subject to the Order Price Protection, the Market Order Spread Protection, or Size Limitation in Options 3, Section 15(a)(1), (a)(2), and (b)(2), respectively; (C) Block Orders, Customer Cross Orders, and PRISM Orders are considered to have a TIF of IOC. By their terms, these orders will be: (1) executed either on entry or after an exposure period, or (2) cancelled. Opening Only The Exchange proposes to relocate Opening Only from current Options 3, Section 7(b)(1)  21 to proposed Supplementary Material .02(e) of Options 3, Section 7 without change. 22 21  Current NTX Options at Options 3, Section 7(b)(1) provides that an Opening Only order (“OPG”) is entered with a TIF of “OPG”. This order can only be executed in the Opening Process pursuant to Options 3, Section 8. This order type is not subject to any protections listed in Options 3, Section 15, except Size Limitation and Market Wide Risk Protection. Any portion of the order that is not executed during the Opening Process is cancelled. OPG orders may not route. 22  The order of the text is slightly changed but not amended. Minimum Quantity Orders The Exchange proposes to no longer offer Minimum Quantity Orders at Options 3, Section 7(a)(4). A Minimum Quantity Order is an order that requires that a specified minimum quantity of contracts be obtained, or the order is cancelled. Minimum Quantity Orders are treated as having a time-in-force designation of Immediate or Cancel. Minimum Quantity Orders received prior to the Opening Process or after market close will be rejected. This order type is not utilized frequently on the Exchange and is not currently offered on ISE, GEMX or MRX. Due to the lack of demand for this order type, the Exchange is no longer utilizing it. Order Entry Protocols The Exchange proposes to relocate the order entry protocols from current Options 3, Section 7(e) to proposed Supplementary Material .03 to Options 3, Section 7. The Exchange proposes to re-letter the subsections from “A, B, and C” to “a, b, and c.” The Exchange proposes to remove the rule text that provides, “(e) Entry and Display or Orders and Quotes. Participants may enter orders and quotes into the System as specified below” to align the rule text with ISE, GEMX, MRX and Phlx Supplementary Material .03 to Options 3, Section 7. The Exchange's proposal to amend the FIX protocol to note that similar to ISE, GEMX, MRX and Phlx at Supplementary Material .03(a) to Options 3, Section 7, that the Exchange will commence offering post trade allocation messages is consistent with the Act as it will allow Participants the same functionality that is currently available to ISE, GEMX, MRX and Phlx market participants. A post trade allocation message allows market participants to specify how an order should be subdivided among one or more accounts. 23 Today, ISE, GEMX, MRX and Phlx provide post trade allocation messages through FIX. 24 23  For example, a Participant may specify the account(s) and their respective order quantities which make up the order. 24   See ISE, GEMX and MRX Supplementary Material .03(a)(i) of Options 3, Section 7. The Exchange proposes to remove a reference to “complex instruments” in the OTTO protocol description at proposed Supplementary .03(b) to Options 3, Section 7. NTX Options does not offer complex instruments. The reference to complex instruments was inadvertent. Routing The Exchange proposes to relocate the rule text at Options 3, Section 7(c)  25 to Supplementary Material .04 of Options 3, Section 7 without change. 25  Current NTX Options at Options 3, Section 7(c) provides that orders may be entered on the Exchange with a routing strategy of FIND, SRCH or Do-Not-Route (“DNR”) as provided in Options 5, Section 4 through FIX only. Order Size The Exchange is removing the sentence that provides, “The term “Order Size” shall mean the number of contracts up to 999,999 associated with the Order.” This term is not used in the Exchange's rules. Options 3, Section 8 The Exchange proposes to amend Options 3, Section 8, Options Opening Process, at Options 3, Section 8(b) to note the eligible interest that will be included in the Opening Process. The Exchange currently provides at Options 3, Section 8(b) that, “Eligible interest during the Opening Process includes Valid Width Quotes, Opening Sweeps, and orders.” First, the Exchange proposes to state, “Eligible interest during the Opening Process includes Valid Width Quotes, Opening Sweeps and orders, including Opening Only Orders, but excluding orders with a Time in Force of Immediate-or-Cancel and Add Liquidity Orders.” The Exchange notes that today Opening Only Orders are included in eligible interest and orders with a Time in Force of “Immediate-or-Cancel” and Add Liquidity Orders are not included because there is no order book during the Opening Process and those orders are not accepted. Second, the Exchange proposes to add a sentence that states, “The displayed and non-displayed portions of the Reserve Orders are considered for execution and in determining the Opening Price throughout the Opening Process.” This sentence describes the handling of newly adopted Reserve Orders in the Opening Process. Also, similar to ISE, GEMX, MRX and Phlx Options 3, Section 8(g), the Exchange proposes to account for the addition of Reserve Orders with respect to the Potential Opening Price  26 in Options 3, Section 8(h). To calculate the Potential Opening Price, the System takes into consideration all Valid Width Quotes and orders (including Opening Sweeps and displayed and non-displayed portions of Reserve Orders) for the option series and identify the price at which the maximum number of contracts can trade (“maximum quantity criterion”). The addition of this rule text will make clear the manner in which the System will handle a Reserve Order during the Opening Process. 26  The Potential Opening Price indicates a price where the System may open once all other Opening Process criteria is met. Similar to other changes noted herein, the Exchange proposes to amend NTX Options at Options 3, Section 8(k)(3)(F) to note how Reserve Orders will be handled in the Opening Process for purposes of execution. The Exchange proposes to state, “The System will execute orders at the Opening Price that have contingencies (such as without limitation, Reserve Orders) and non-routable orders, such as “Do Not Route” or “DNR” Orders, to the extent possible. This rule text will add transparency to the Exchange's rule text and mirror rule text in ISE, GEMX and MRX Options 3, Section 8(j)(6) and Phlx Options 3, Section 8(k)(6). Additionally, the Exchange proposes to state, “The System will only route non-contingency orders, except Reserve Orders may route up to their full volume.” With this proposal, NTX Options would have the following contingency orders that will not route: a Stop Order, an All-or-None Order and a Fill-or-Kill Order. Finally, the Exchange proposes to amend rule text in the Opening Process Cancel Timer at NTX Options at Options 3, Section 8(l). With the retention of the “Good Til Cancelled Order,” renamed “Good-Till-Canceled,” and adoption of the “Good-Till-Date Order,” the Exchange proposes to amend the order types in the last sentence of Options 3, Section 8(l) for consistency. The Exchange proposes to amend Options 2, Section 4, Obligations of Market Makers and Lead Market Makers at paragraph (l)(2)(a) to change “Opening Cross” to “Opening Process” to conform to Options 3, Section 8. Options 3, Section 9 The Exchange proposes to amend Options 3, Section 9, Trading Halts. Specifically, the Exchange proposes to amend Options 3, Section 9(d)(1) to change the word “Exchange” to “System” which more precisely describes the functionality. The Exchange proposes to amend Options 3, Section 9(d)(2) to describe the manner in which the newly adopted Stop Order will be treated during a trading halt. The Exchange proposes to mirror the treatment of Stop Orders in ISE, GEMX, MRX and Phlx Options 3, Section 9(d)(3). The Exchange proposes to add this sentence to Options 3, Section 9(d)(2), “Provided the Exchange has opened an affected option for trading, the Exchange shall elect Stop Orders if the condition as provided in Options 3, Section 7(d) is met, and, because they become Market Orders, shall cancel them back and notify Participants of the reason for such rejection.” Stop Orders would become elected as provided for in proposed Options 3, Section 7(d). 27 If they elect as Market Orders, those Market Orders would be rejected. This aligns to the current treatment for Market Orders during a trading halt. 27  As proposed in NTX Options at Options 3, Section 7(d) a Stop Order becomes a Market Order when the stop price is elected. A Stop Order to buy is elected when the option is bid or trades on the Exchange at, or above, the specified stop price. A Stop Order to sell is elected when the option is offered or trades on the Exchange at, or below, the specified stop price. Options 3, Section 10 The Exchange proposes to amend NTX Options at Options 3, Section 10, Order Book Allocation. Similar to the ISE, GEMX and MRX applicability language in Options 3, Section 10, the Exchange proposes to clarify that the allocations specified in Options 3, Section 10 do not apply to the Price Improvement Auction (“PRISM”) described within Options 3, Section 13, unless Options 3, Section 10 is specifically referenced. This sentence provides greater information as to the applicability of Options 3, Section 10. The Exchange proposes to add a sentence at Options 3, Section 10(a)(A) with respect to Price/Time allocation that states, “Allocation of displayed interest shall occur before allocation of non-displayed interest at each price level.” This additional rule text accounts for the allocation of Reserve Orders which have both displayed and non-displayed interest. Today, ISE, GEMX and MRX Options 3, Section 10(c) provide for a Size Pro-Rata allocation. Currently Options 3, Section 10(a)(1)(B) describes Size Pro-Rata allocation as follows: (B) Size Pro-Rata—The System shall execute trading interest within the System in price priority, meaning it will execute all trading interest at the best price level within the System before executing trading interest at the next best price. Within each price level, if there are two or more quotes or orders at the best price, trading interest will be executed based on the size of each Participant's quote or order as a percentage of the total size of all orders and quotes resting at that price. If the result is not a whole number, it will be rounded up to the nearest whole number. The Exchange proposes to amend NTX Options at Options 3, Section 10(a)(1)(B) to provide The System shall execute trading interest within the System in price priority, meaning it will execute all trading interest at the best price level within the System before executing trading interest at the next best price. Within each price level, if there are two or more quotes or orders at the same price, the System allocates contracts from an incoming order or quote to resting orders and quotes beginning with the resting order or quote displaying the largest size proportionally according to displayed size, based on the total number of contracts displayed at that price. If the result is not a whole number, it will be rounded up to the nearest whole number. If there are still contracts to be allocated after the displayed size of all orders at that price has been executed, the remaining size from the incoming order will be allocated proportionally against non-displayed interest according to remaining total size of each resting order at such price, beginning with the order which has the largest total size remaining. The Exchange is aligning the description of Size Pro-Rata to ISE, GEMX and MRX Options 3, Section 10(c) to account for the fact that it is adopting Reserve Orders which will have both a displayed size and a non-displayed size. The Size Pro-Rata allocation divides the remainder proportionally among the non-displayed interest. Both the displayed and non-displayed portions of a Reserve Order are available for potential execution against incoming marketable orders or quotes. The non-displayed portion of any Reserve Order is available for execution only after all displayed interest on the single-leg order book has been executed. The Exchange proposes to correct references to “book” with “order book” in various places throughout Options 3, Section 10. Finally, the Exchange proposes to include the word “Process” after “Opening” in Options 3, Section 10(a)(5). Options 3, Section 15 Acceptable Trade Range The Exchange proposes to amend the last sentence of Acceptable Trade Range or “ATR” at Options 3, Section 15(b)(1) that states, “The Acceptable Trade Range will not be available for All-or-None Orders or Minimum Quantity Orders.” The Exchange proposes to remove Minimum Quantity Orders as they will no longer be offered. Options 3, Section 20 The Exchange proposes to add language at Options 3, Section 20(i), Nullification and Adjustment of Options Transactions including Obvious Errors, to describe the treatment of Stop and Stop-Limit Orders triggered by an erroneous trade. The Exchange proposes to note that transactions resulting from the triggering of a Stop or Stop-Limit Order by an erroneous trade in an option contract shall be nullified by the Exchange, provided a party notifies an Official  28 in a timely manner as set forth below. If a party believes that it participated in an erroneous transaction pursuant to this paragraph it must notify an Official within the timeframes set forth in sub-paragraph (c)(2), 29 with the allowed notification timeframe commencing at the time of notification of the nullification of transaction(s) that triggered the Stop or Stop-Limit Order. The Exchange also proposes to re-letter current (i)-(k). This proposed rule text is identical to Phlx Options 3, Section 20(i). 28  The term “Official” shall mean an Exchange staff member or contract employee designated as such by the Chief Regulatory Officer. A list of individual Officials shall be displayed on the Exchange website. The Chief Regulatory Officer shall maintain the list of Officials and update the website each time a name is added to, or deleted from, the list of Officials. In the event no Official is available to rule on a particular matter, the Chief Regulatory Officer or his/her designee shall rule on such matter. See Options 3, Section (a)(3). 29  Options 3, Section 20(c)(2) describes the time deadlines for a party that believes that it participated in a transaction that was the result of an Obvious Error to notify an Official in the manner specified by the Exchange. Options 3, Section 22 The Exchange proposes to amend Options 3, Section 22, Limitations on Order Entry, to adopt a new Supplementary Material .01 to provide that, “With respect to the non-displayed reserve portion of a Reserve Order, the exposure requirement of paragraphs (a) and (c) are satisfied if the displayable portion of the Reserve Order is displayed at its displayable price for one second.” ISE, GEMX and MRX Supplementary Material .02 to Options 3, Section 22 contains identical rule text. Options 3, Section 28 The Exchange proposes to amend Options 3, Section 28, “Optional Risk Protections.” The Exchange proposes to align the rule text to ISE, GEMX, MRX and Phlx Options 3, Section 28 rule text. The proposed changes do not amend the functionality of the optional risk protections. The Exchange proposes to add the words “daily” before the aggregate notional dollar value and aggregate quantity to be more explicit about those values. Further, the Exchange proposes to make clear in amended paragraph (c) the per order and on aggregate optional protec