What Is Bats Global Markets?
Bats Global Markets was a U.S.-based exchange that listed several various kinds of investments, including equities, options, and foreign exchange. It was founded in 2005 and was acquired by Cboe Options Exchange (Cboe) in 2017. Prior to being acquired, Bats Global Market was one in every of the most important U.S. exchanges and well-known for its services to broker-dealers in addition to retail and institutional investors.
Key Takeaways
- Higher Alternative Trading Systems was rebranded to Bats Global Markets in 2008 when the exchange made a foray into European markets.
- CBOE acquired Bats in 2017 and migrated three of its exchanges to the Bats Global Markets platform.
- Prior to the acquisition, Bats had turn into one in every of the most important exchanges on the earth with listings in stocks, options, ETFs, and foreign exchange.
Understanding BATS
Bats Global Markets was previously generally known as Higher Alternative Trading System (BATS) and was initially branded instead trading platform, marketing itself to investors as an organization that was more progressive than established exchanges. When it entered the European market in 2008, the corporate was rebranded as Bats Global Markets.
As an exchange, Bats grew into the most important competitor to the Latest York Stock Exchange (NYSE) and Nasdaq, each of which handled a greater amount of equities when ranked by market capitalization. In 2016, Bats had turn into the second-largest U.S. equity exchange by market share and was the most important exchange-traded fund (ETF) exchange.
In the US, its BZX Exchange became a registered exchange in 2008, and its BYX Exchange was launched in 2010. Between 2011 and 2015, Bats merged with and bought several exchanges. In 2011, it acquired Chi-X Europe, making it the most important stock exchange in Europe. In 2014, a merger with Direct Edge added the EDGA and EDGX exchanges. In 2015, Bats acquired Hotspot, an electronic communication network (ECN), allowing institutional investors spot trading, swap execution, and forward trading services.
BATS vs. Cboe
BATS experienced several notable technical hurdles over time. The corporate sought to go public in an initial public offering in 2012, with shares being offered by itself exchange. This effort was scrapped when a serious technical issue resulted in its IPO price tumbling from $16 per share to $0.04 a share.
In 2013, the corporate indicated that a technical error led to lots of of 1000’s of trades executing at prices lower than the most effective bid and offer, which also affected investors who were selling shares short. The error affected trades going back 4 years.
Cboe, the owner of the Cboe Options Exchange and Cboe Futures Exchange (CFE), made a proposal to amass Bats Global Markets in 2017. The acquisition allowed Cboe to expand into Europe and increase its offerings to incorporate foreign exchange and ETFs. Cboe now operates 4 U.S. options markets, Cboe Futures Exchange, a European equities market, 4 U.S. equities markets, and a foreign exchange market. Three of the exchanges that Cboe operated prior to acquiring Bats migrated to the Bats trading platform.