What it means
In the United States, listed options trade on several exchanges at the same time. Without a central reporting system, an investor would have to check each exchange separately to find the best price.
OPRA solves this by gathering quotes and last-sale information from every participating exchange and publishing them together. The consolidated feed supports fair dealing.
Brokers use it to check that they are giving customers the best available price, and the market data shows the best bid and offer across venues. This idea of a combined view is central to how the options market works.
OPRA is not an exchange and does not match orders. It is a plan, meaning a formal arrangement among the exchanges, that sets the rules for sharing data and handles the fees charged to those who receive it.
The revenue is then shared among the participating exchanges according to the plan. The data volume is large because every option contract has its own quotes.
Each stock can have many strike prices and expiry dates, and each combination is quoted separately, so the feed carries a very high number of messages. Firms that use it need capable systems and pay data fees accordingly.
The plan also has a regulatory purpose. Rules for the national market system require that quotes and trades be shared in a way that lets brokers and the public see the best prices, and OPRA is the mechanism that does this for options.
It therefore underpins the integrity of the market as well as its convenience. For finance teams, OPRA matters mostly as the source behind the option prices shown on screens and in reports.
When a company values options positions for its accounts, the market data it uses often traces back to the consolidated feed. Understanding where prices come from is part of judging how reliable they are.
In practice
Real-world examples.
Example
A retail investor looks up the price of a call option on her broker's app. The bid and offer shown come from the consolidated OPRA feed, so she sees the best prices available across all the exchanges rather than just one. Without the feed she would need to compare several exchange screens by hand.
Example
A broker-dealer checks that a customer's order was executed at the best available price. It compares the trade with the OPRA quotes at the same moment to prove it gave fair treatment. The compliance team keeps the comparison on file for any later review by a regulator.
Example
A corporate treasury team that holds a hedging option values it at the period end. It uses the mid-point of the best bid and offer, taken from a market data supplier that receives the OPRA feed. The valuation is documented so the auditors can trace the price back to its source.
Case study
Seen in the real world.
Silverline Brokerage is a fictional firm that was building a trading platform for options. The product manager asked why the data costs were so high, and the finance lead investigated.
She found that the firm needed the consolidated feed to display best prices and meet its duty to provide good execution. The fees were charged under the OPRA plan and depended on how many users accessed the data and how it was used. She also noticed that professional users paid a higher rate than individual investors, which changed the cost of each customer group.
In this illustrative story the firm cut its costs by limiting the real-time data to professional users and showing delayed data to casual visitors. The finance lead learned that market data is a significant running cost that needs a budget like any other. She added a monthly line to the forecast, checked the usage reports against the invoices each month, and asked the product team to switch off feeds that nobody was using.
Watch out
Common mistakes.
- Thinking OPRA is an exchange where orders are matched, when it is a data reporting authority.
- Ignoring market data fees when budgeting for a trading platform, which can lead to an unexpected gap between the forecast cost and the real cost once the service is live.
- Assuming every price shown on a screen is the best available, when some displays show only one exchange or delayed data.
Questions
People also ask.
What does OPRA do?
It collects and distributes quotes and trade reports for listed options from all the participating exchanges as a single feed. In effect it gives the whole market one shared price display.
Who pays for OPRA data?
Firms and users who receive it, according to a fee schedule that depends on the type of user and how the data is used. Many retail investors never pay directly, because their broker covers the cost.
Is OPRA relevant outside the United States?
Not directly, since it covers United States listed options, although other markets have their own arrangements for consolidating data.
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