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IEX Order Types

The IEX trading platform and its technological features may be protected by patents and patent applications owned by IEX Group, Inc. For more information, including a current list of IEX’s issued patents and published patent applications, please refer to https://iextrading.com/patent-notice/. This list will be periodically updated without further notice.

IEX offers nine order types for continuous trading: Market, Limit, Midpoint Peg, Discretionary Peg™ (D-Peg®), Primary Peg (P-Peg®), Market Maker Peg, Retail, Retail Liquidity Provider (RLP), and Corporate Discretionary Peg* (Corporate D-Peg or C-Peg). IEX also offers four order types to specifically participate in IEX Auctions: Market-On-Open, Limit-On-Open, Market-On-Close, and Limit-On-Close. IEX Auctions and the associated order types are described further in the IEX Opening and Closing Auction Quick Guide and IEX Auction Process Specification.

Aside from the benefits of the IEX Speed Bump, IEX’s Market, Limit, Midpoint Peg, and Market Maker Peg order types behave in a similar way to those order types on other exchanges. In addition, IEX has added innovative predictive capabilities to D-Peg, Primary Peg, and C-Peg that are designed to protect those orders from trading during unstable, potentially adverse conditions. IEX’s retail-focused order types, Retail orders and RLP orders, are designed to bring high-quality midpoint trading to the retail trading ecosystem.

Detail about the IEX Signal (Crumbling Quote Signal), IEX's predictive tool that is designed to detect price transitions and protect orders from trading at soon-to-be stale prices, as well as the behaviors of each order type, are included below.

Order Types Summary

Display Eligible Reserve Eligible Minimum Quantity Eligible Limit Price Required Book Recheck Eligible Auction Eligible
Discretionary Peg No No Yes Optional Yes Closing Auction
Corporate Discretionary Peg * No No Yes Optional Yes Closing Auction
Primary Peg No No Yes Optional No Closing Auction
Midpoint Peg No No Yes Optional Yes Closing Auction
Market Maker Peg Yes1 No No Optional No Closing Auction
Retail Liquidity Provider No No Yes Optional No No
Retail 2 No No Yes Optional No No
Limit Yes Yes Yes Yes Displayed orders: No
Non-displayed orders: Yes
All Auctions
Market No No Yes No, not accepted No Halt, Volatility, and IPO Auctions
Market-On-Open N/A N/A No No, not accepted No Opening Auction
Limit-On-Open N/A N/A No Yes No Opening Auction
Market-On-Close N/A N/A No No, not accepted No Closing Auction
Limit-On-Close N/A N/A No Yes No Closing Auction

1 Required to be fully displayed

2 Summary applies to eligible Retail orders (D-Peg or Midpoint Peg with Time-in-Force = Immediate or Cancel or Fill-or-Kill).

The IEX Signal

The IEX Signal uses a proprietary model to predict whether a particular quote is unstable or “crumbling,” meaning that the National Best Bid (NBB) is likely about to decline or the National Best Offer (NBO) is likely about to increase.

When the IEX Signal indicates that the NBB (NBO) is likely about to decline (increase), the IEX Signal is “on.” During this time resting D-Peg, Primary Peg, RLP, and C-Peg orders on IEX do not exercise price discretion, and continue resting less aggressively, thus protecting these orders from trading in potentially unstable, adverse conditions.

For more detail on the formula and development process behind the IEX Signal, please read our white paper, "The Evolution of the Crumbling Quote Signal."

Discretionary Peg Order Type

Discretionary Peg (D-Peg) is a non-displayed order type that is priced at the less aggressive of one (1) Minimum Price Variant (MPV, $0.01 for most stocks) lower (higher) than the NBB (NBO) for buy (sell) orders or the order’s limit price. D-Peg orders passively rest on the IEX order book while seeking to access liquidity at a more aggressive price up to the midpoint of the National Best Bid or Offer (NBBO), except when the IEX Signal determines that the quote is unstable or “crumbling.”

Functionality

D-Peg combines elements of Midpoint Peg and Primary Peg, as well as other traditional discretionary order types.

Discretionary Peg functionality

Information about potentially unstable quotes is detected by the IEX Signal, which provides D-Peg orders with an instruction to stop seeking liquidity at a more aggressive price until the quote returns to a stable state.

Examples

Scenario 1: Quote is Stable, IEX Signal is “Off”

The NBBO is $10.10 x $10.14. D-Peg buy order with a $10.13 limit is entered and booked at $10.09, one MPV below the NBB. The quote is stable.

  • Example 1: ISO Sell order with $10.09 limit crosses the spread and executes with D-Peg order at $10.09
  • Example 2: Sell order with $10.10 limit crosses the spread and D-Peg order uses $0.01 of discretion to trade at $10.10
  • Example 3: Sell order with $10.11 limit expresses its full limit and D-Peg order uses $0.02 of discretion to trade at $10.11
  • Example 4: D-Peg order uses $0.03 of discretion to trade with a Midpoint-Peg sell order at $10.12
  • Example 5: D-Peg orders cannot execute at prices more aggressive than the midpoint; no trade occurs

Discretionary Peg example 1

Scenario 2: Quote is Crumbling, IEX Signal is “On”

The NBBO is $10.10 x $10.14. D-Peg buy order with a $10.13 limit is entered and booked at $10.09, one MPV below the NBB. The quote is unstable.

  • Example 1: ISO Sell order with $10.09 limit crosses the spread and executes with D-Peg order at $10.09
  • Example 2: Sell order with $10.10 limit crosses the spread, but D-Peg order does not use discretion; no trade occurs
  • Example 3: Sell order with $10.11 limit expresses its full limit, but D-Peg order does not use discretion; no trade occurs
  • Example 4: Midpoint sell order enters, but D-Peg order does not use discretion; no trade occurs
  • Example 5: D-Peg orders cannot execute at prices more aggressive than the midpoint; no trade occurs

Discretionary Peg example 2

Corporate D-Peg Order Type*

Corporate D-Peg (C-Peg) is a non-displayed buy order type designed for corporate buyback orders that is priced at the less aggressive of one (1) Minimum Price Variant (MPV, $0.01 for most stocks) lower than the NBB, the last sale, or the order’s limit price. C-Peg orders passively rest on the IEX order book while seeking to access liquidity at the lower price up to the midpoint of the National Best Bid or Offer (NBBO) or last sale, except when the IEX Signal determines that the quote is unstable or “crumbling.”

Functionality

C-Peg uses the IEX Signal functionality of D-Peg but is constrained to exercise discretion to the lesser of the last sale price or midpoint price during periods of quote stability and rests at the least aggressive (lowest) of 1 MPV below the NBB, the last sale, or the limit price.

Corporate D-Peg functionality

Information about potentially unstable quotes is detected by the IEX Signal, which provides C-Peg orders with an instruction to stop seeking liquidity at a more aggressive price until the quote returns to a stable state.

Examples

Scenario 1: Quote is Stable, IEX Signal is “Off”

C-Peg buy order is booked 1 MPV below the NBB with 10.13 limit during a period of quote stability. The last sale was at $10.11.

  • Example 1: ISO Sell order with a $10.09 limit crosses the spread; trade occurs at the resting price of $10.09 (lower than last sale of $10.11).
  • Example 2: Sell limit order with a $10.11 limit; trade occurs at the discretionary price of $10.11 (equal to last sale).
  • Example 3: Sell limit order with a $10.12 limit checks midpoint; no trade occurs as C-Peg is constrained by the last sale price of $10.11.

Corporate D-Peg example 1

Scenario 2: Quote is Crumbling, IEX Signal is “On”

C-Peg buy order is booked 1 MPV below the NBB with a $10.13 limit during a crumbling quote. The last sale was at $10.13.

  • Example 1: Sell IOC order with a $10.12 limit checks the midpoint, and C-Peg order recognizes that quote is crumbling and does not execute discretion; no trade occurs.
  • Example 2: D-Peg sell FOK order with a $10.12 limit checks the midpoint, and C-Peg order recognizes that quote is crumbling and does not execute discretion; no trade occurs.

Corporate D-Peg example 2

Scenario 3: Last Sale Price Constraint

C-Peg buy order is booked at the last sale price, $10.08, during a period of quote stability. The NBB is $10.10.

  • Example 1: ISO sell order with a $10.08 limit crosses the spread; trade occurs at the resting price of $10.08 (equal to last sale).
  • Example 2: Sell limit order with a $10.09 limit first interacts with any liquidity at the NBB on IEX and then with any resting D-Peg orders; C-Peg will not exercise discretion to due to last sale price constraint.

Corporate D-Peg example 3

Primary Peg Order Type

IEX’s Primary Peg is a non-displayed order type which extends the protections of D-Peg and the IEX Signal to trading at the NBB for buys and NBO for sells.

IEX Primary Peg orders rest on the order book 1 minimum price-variant (MPV, $0.01 for most stocks) lower than the NBB for buy orders and 1 MPV higher than the NBO for sell orders. They exercise discretion to trade at the NBB or NBO when the quote is stable, but stay booked 1 MPV away from the NBBO during a crumbling quote, as determined by the IEX Signal.

Examples

Scenario 1: Quote is Stable, IEX Signal is "Off"

Primary Peg buy order booked at 10.09, 1 MPV below the NBB. The NBBO is 10.10 x 10.14, during a period of quote stability.

  • Example 1: Sell ISO with a $10.09 limit crosses the spread and executes with the Primary Peg order at its resting price of $10.09.
  • Example 2: Sell order with a $10.10 limit crosses the spread and the Primary Peg order exercises price discretion to execute on the NBB at $10.10.
  • Example 3: Sell order with a $10.11 limit enters but doesn’t trade with the Primary Peg order, because Primary Peg orders cannot execute at prices more aggressive than the NBB for buy orders (or NBO for sell orders); no trade occurs.

Primary Peg example 1

Scenario 2: Quote is Crumbling, IEX Signal is "On"

Primary Peg buy order booked at 10.09, 1 MPV below the NBB. The NBBO is 10.10 x 10.14, during a period of quote instability (i.e., the quote is crumbling).

  • Example 1: Sell ISO with a $10.09 limit crosses the spread and executes with the Primary Peg order at its resting price of $10.09.
  • Example 2: Sell order with a $10.10 limit crosses the spread, but the Primary Peg order does not exercise price discretion while the Signal is on; no trade occurs.
  • Example 3: Sell order with a $10.11 limit enters but doesn’t trade with the Primary Peg order, because Primary Peg orders cannot execute at prices more aggressive than the NBB for buy orders (or NBO for sell orders); no trade occurs.

Primary Peg example 2

Retail Order Type

Any order submitted by a Retail Member Organization that is designated with a “Retail order” modifier. Retail orders must be submitted by a Retail Member Organization (RMO), designated with a “Retail order” modifier, and reflect trading interest of a natural person, with no change made to the terms of the underlying order of the natural person with respect to price (except in the case of a market order that is changed to a marketable limit order) or side of market. Additionally, Retail orders cannot originate from a trading algorithm or any other computerized methodology.

Retail orders submitted as D-Peg or Midpoint Peg orders with a Time-in-Force (TIF) of Immediate or Cancel (IOC) or Fill-or-Kill (FOK) only trade at the midpoint and are eligible to interact with RLP orders as well as other orders priced to execute at the midpoint price. For those orders, any unexecuted portion of such Retail orders will be canceled once all midpoint liquidity on the Exchange is exhausted.

Retail orders submitted by RMOs that are not designated D-Peg or Midpoint Peg orders with a TIF of IOC or FOK are not eligible for interaction against RLP orders. For these orders, the Retail order modifier will be disregarded, and the order will be handled (and executions priced) like any other order on IEX, as described in the IEX Rule Book.

Retail Liquidity Provider Order Type

Retail Liquidity Provider (RLP) is a variation of a D-Peg order that only executes against eligible Retail orders. Like D-Peg, RLP is a non-displayed order type that is priced at the less aggressive of one MPV lower (higher) than the NBB (NBO) for buy (sell) orders or the order’s limit price. RLP orders passively rest on the IEX order book while seeking to exclusively access incoming eligible Retail orders at the midpoint of the NBBO, except when the IEX Signal determines that the quote is unstable or “crumbling.” Eligible Retail orders are those that are either Midpoint Peg or D-Peg and have a Time-in-Force (TIF) of Immediate or Cancel (IOC) or Fill-or-Kill (FOK).

RLP orders interact with eligible Retail orders after such orders interact with other non-displayed orders priced to trade at the midpoint of the NBBO, including Limit orders, Midpoint Peg, and D-Peg.

Functionality

RLP uses the IEX Signal functionality of D-Peg but only executes against eligible Retail orders after other non-displayed orders priced to the midpoint.

Retail Liquidity functionality

Information about unstable quotes is detected by the IEX Signal, which provides RLP orders with an instruction to stop seeking Retail order liquidity at the midpoint price until the quote returns to a stable state, as determined by the IEX Signal.

Examples

Scenario 1: Quote is Stable, IEX Signal is “Off”

The NBBO is $10.10 x $10.14. RLP buy order with a $10.13 limit is entered and booked at $10.09, one MPV below the NBB. The quote is stable.

  • Example 1: Non-Retail ISO Sell order with a $10.09 limit crosses the spread; no trade occurs (not a Retail order)
  • Example 2: Retail Limit order with a 10.12 limit checks the IEX midpoint; no trade occurs (not an eligible Retail order)
  • Example 3: Retail Midpoint Peg Sell IOC order with a 10.13 limit; no trade occurs (eligible Retail order but not priced to the midpoint)
  • Example 4: Retail Midpoint Peg Sell IOC order with a $10.12 limit checks the IEX midpoint; RLP uses discretion and executes with the eligible Retail Midpoint Peg at $10.12
  • Example 5: Retail D-Peg Sell FOK order with a $10.12 limit checks the IEX midpoint; RLP uses discretion and executes with the eligible Retail D-Peg at $10.12

Retail Liquidity example 1

Scenario 2: Quote is Crumbling, IEX Signal is “On”

The NBBO is $10.10 x $10.14. RLP buy order with a $10.13 limit is entered and booked at $10.09, one MPV below the NBB. The quote is unstable.

  • Example 1: Retail Midpoint Peg Sell IOC order with a $10.12 limit checks the IEX midpoint and RLP order recognizes that quote is crumbling and does not execute discretion; no trade occurs
  • Example 2: Retail D-Peg Sell FOK order with a $10.12 limit checks the IEX midpoint and RLP order recognizes that quote is crumbling and does not execute discretion; no trade occurs

Retail Liquidity example 2

Midpoint Peg Order Type

Midpoint Peg is a non-displayed order type that is priced at the midpoint of the NBBO, subject to the order’s limit price, if any. These orders do not change their behavior during periods of quote instability, and when D-Peg orders exercise price discretion to the midpoint of the NBBO, Midpoint Peg orders have priority over D-Peg orders.

Market Maker Peg Order Type

To support Market Makers with their quoting obligations for registered securities, IEX has created a Market Maker Peg order type. This order type essentially functions as a displayed Peg order that will allow for quoting at an offset to a defined Reference Price identified by the Exchange. As described in the Market Maker Specification, a Market Maker Peg order is repriced by the System when the Reference Price has moved a defined percentage away or towards the order. A Market Maker Peg order will continue to be repriced by the System until it reaches the Member-defined limit, if any, or an impermissible price (e.g., priced at $0.00), at which time such order will be canceled back to the Member. If a Market Maker Peg order is decremented to less than one round lot, the order will also be canceled back to the Member.

Limit Order Type

An order to buy or sell a stated amount of a security at a specified price or better. A marketable limit order is a limit order to buy (sell) at or above (below) the lowest (highest) Protected Offer (Bid) for the security. IEX accepts displayed, non-displayed, or reserve limit orders. Additionally, limit orders may be designated as routable. Finally, limit orders may be an ISO.

Market Order Type

An order to buy or sell a stated amount of a security that is to be executed at or better than the NBBO at the time the order reaches IEX. Market orders are never displayable. Market orders do not trade through Protected Quotations, therefore any unexecuted portion of a market order will be canceled if all liquidity on the Exchange at or better than the best priced Protected Quotation is exhausted. IEX accepts market orders designated as routable. Any portion of a routable market order that cannot be executed on the Exchange at or better than the best priced Protected Quotation will be eligible for routing to away trading centers. A routable market order will trade at increasingly aggressive prices, fully satisfying all Protected Quotations, until the order is fully filled, reaches the LULD Price Band, or reaches the IEX Router Constraint.

Please see the IEX Rule Book for a complete description of all order types.

* The Corporate D-Peg order type is approved and will be introduced November 7, 2019. Please note the revised deployment schedule detailed in IEX Trading Alert #2019 – 032.