Bats Global Markets (Bats), a leading operator of exchanges and services for financial markets globally, 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 today, 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 now be called BZX Options. The launch of EDGX Options will enable BATS to compete for a new segment of order flow that does not trade on the price-time markets that BATS 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. BZX Options market share was 9.4% in March, more than doubling from 4.1% a year ago.
“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, Executive Vice President and Head of U.S. Markets at BATS. “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.”
On Monday, April 13, BATS successfully migrated the technology platform for the BZX Options exchange to the Equinix NY5 data center. EDGX Options will also be located in the NY5 data center with all the other BATS U.S. markets and will leverage BATS’state-of-the-art technology, including customer connectivity, messaging protocols, quotation and execution engine, order router, data feeds and infrastructure. This approach will minimize the technology effort required for existing Exchange Members to begin trading on EDGX Options.
BATS expects that all of the industry’s multiply-listed options will be available for trading on EDGX Options. Details regarding the fee schedule, launch date, rollout, technical specifications and testing schedule for EDGX Options will be announced at a later date.