Pegged to Stock

Sometimes referred to as Relative to Stock, a pegged to stock order specifies that the option price will adjust automatically relative to the stock price, using a calculated value based on data you enter.

A Pegged to Stock order direct-routed to BOX puts you in BOX's Price Improvement auction.



To create a Pegged to Stock order

  1. Click the Ask price to create a BUY options order, or the Bid price to create a SELL options order.
  2. Select PEG STK in the Type field. Ensure that the supporting Pegged order fields are visible.If you don't see PEG STK in the Type list, check to be sure that your option is routed to SMART (or an exchange that supports this order type). This order type is only valid for US Equity options.
  3. In the Delta field, enter an absolute value which will be used as a percent, eg. "5" equals 5%.

    This percent value is signed positive for calls and negative for puts. This value is multiplied by the change in the underlying stock price, and the product is added to the starting price to determine the option price.

  4. The Stock Reference Price used is the midpoint of the NBBO at the time of the order. You can change this value if desired.
  5. Define an optional high/low stock range if desired. If the stock price moves outside of the range, your order will be canceled. Use the Underlying Range (High) and Underlying Range (Low) fields.
  6. The Starting Price for the option order is the midpoint of the option NBBO at the time of the order. You can change this value if desired.

When you create a pegged to stock order using the Order Ticket, use the Basic tab to select the order type and set the Starting price. Use the Pegged tab to set the Stock Ref. price, the high and low underlying range limits, and the Delta value.

For more details and an example of a pegged-to-stock order, visit the Order Types information page.