BATS Global Markets today filed rules to launch a second options exchange, EDGX Options, with the Securities and Exchange Commission (SEC). BATS, operator of the fastest-growing U.S. options market, is planning to launch the new exchange in November 2015, pending SEC approval.
EDGX Options will be based on a customer priority/pro rata allocation model, and is designed to complement the existing fast-growing BATS Options market, which will be called BZX Options from now on. The launch will enable BATS to compete for a new segment of order flow that does not trade on the price-time markets that it currently operates.
Launched in February 2010, BZX Options is a pure price-time priority market with a maker-taker pricing model that trades all multiply-listed equity options available for trading in the U.S. The BZX Options market share was 9.4% in March, more than double from last year’s figure of 4.1%.
“With two-thirds of U.S. options market volume executed on exchanges with a pro rata model, we see a big opportunity to bring our innovative technology, operating efficiency, market leading pricing, and first-class customer service to help make markets better for participants in this segment of the market,” said Bryan Harkins, BATS’ Executive Vice President and Head of U.S. Markets. “We are excited to build on our options momentum with the launch of EDGX Options, which we believe will complement our existing innovative BZX Options market, which is the largest maker-taker options market in the U.S.”
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Old Exchanges Migrate to NY5 Data Center
BATS also reported the complete migration of its Options market to the Equinix NY5 data center in Secaucus, N.J., on Monday, April 13. The migration proceeded as expected and the system handled more than 2 billion messages over the past two days with rates exceeding 4 million messages per second at the close.
All BATS Options customers participated on the platform and market share finished at a strong 9.2% Tuesday.
“We are pleased to successfully migrate the BATS Options market in a seamless manner to the NY5 data center, marking an important milestone in the overall migration process, and we thank our customers for their continued support,” said Chris Isaacson, Executive Vice President and Global Chief Information Officer for BATS. “With our growing options market share tracking at a record 9.6% this month, and our new home at the NY5 data center, BATS Options is well-poised for growth in the months ahead.” To create greater efficiency and reduce infrastructure costs for its members, BATS is moving all its U.S. markets to the NY5 data center.
BATS kicked off this process earlier this year with the migration of two of its equities exchanges, EDGA and EDGX, to NY5 on January 12th and will move its two other equities exchanges, BYX and BZX, on May 4th. BATS will eventually move the Hotspot FX market technology to NY5.