Discover BATS Global Markets: A Leading U.S. Exchange Revolutionizing Trading
Explore BATS Global Markets, a pioneering U.S. stock exchange offering diverse trading options including equities, options, and foreign exchange, now integrated with Cboe.
Thomas J Catalano, a Certified Financial Planner and Registered Investment Adviser in South Carolina, founded his own advisory firm in 2018. His expertise spans investments, retirement planning, insurance, and comprehensive financial strategies.
What Is BATS Global Markets?
BATS Global Markets, originally known as Better Alternative Trading System, was a prominent U.S.-based exchange providing trading in equities, options, and foreign exchange. Established in 2005, it quickly rose to prominence and was acquired by Cboe Options Exchange in 2017. Before the acquisition, BATS was recognized as one of the largest U.S. exchanges, serving broker-dealers, retail investors, and institutions alike.
Key Highlights
- Originally launched as Better Alternative Trading System, it was rebranded to BATS Global Markets in 2008 to reflect its expansion into European markets.
- In 2017, Cboe acquired BATS, integrating three of its exchanges into the BATS platform.
- Before merging with Cboe, BATS was among the world's largest exchanges, listing stocks, options, ETFs, and foreign exchange products.
Understanding the Evolution of BATS
BATS started as an innovative alternative trading platform, positioning itself as a forward-thinking competitor to established exchanges. Its 2008 rebranding to BATS Global Markets coincided with its strategic entry into Europe.
Throughout its growth, BATS became a formidable rival to giants like the New York Stock Exchange (NYSE) and Nasdaq. By 2016, it was the second-largest U.S. equity exchange by market share and the leading exchange for exchange-traded funds (ETFs).
Key milestones include the registration of its BZX Exchange in 2008 and the launch of the BYX Exchange in 2010. Between 2011 and 2015, BATS expanded through acquisitions: Chi-X Europe (2011), making it Europe's largest stock exchange; a merger with Direct Edge (2014), adding EDGA and EDGX exchanges; and the purchase of Hotspot (2015), an electronic communication network offering advanced trading services to institutional investors.
BATS and Cboe: A Strategic Merger
Despite its success, BATS faced technical challenges, including a failed IPO attempt in 2012 due to a significant technical glitch that caused its share price to plummet dramatically. Additionally, in 2013, a technical error led to hundreds of thousands of trades executing below the best bid and offer prices, impacting short sellers and dating back four years.
In 2017, Cboe, known for its options and futures exchanges, acquired BATS Global Markets. This acquisition expanded Cboe's reach into European markets and broadened its product offerings to include foreign exchange and ETFs. Post-acquisition, Cboe operates multiple U.S. options and equities markets, a European equities market, a futures exchange, and a foreign exchange market, with several exchanges migrated onto the BATS trading platform.
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