The Securities and Exchange Commission (SEC) has approved a rule change proposed by Cboe Exchange, Inc. The rule now allows market makers with an appointment in S&P 500 Index Options (SPX) to participate in Automated Improvement Mechanism (AIM) auctions, which could potentially improve pricing and liquidity. Previously, such market makers were restricted from participating in these electronic auctions, though they could participate in open outcry trading. This change aims to bring the benefits of open outcry trading to electronic settings, offering better price opportunities for retail investors in SPX options.
Simple Explanation
The SEC says that more people who help set prices for S&P 500 options can join in special electronic trading games, which is like playing on a computer instead of in a playground, to help find better prices for buying and selling.