Bats Stock Exchange
Bats Stock Exchange: BATS is a registered exchange and started as a subsidiary of BYX in October 2008. The company has since become a leader in innovation, acquiring many other exchanges between 2011 and 2015, including Hotspot ECN and Chi-X Europe.
However, BATS faced many challenges when it went public in 2012, including multiple trades below the best offer or bid, and short-selling. In 2017, the company was purchased by Cboe Holdings.
Trade-throughs happened 433,000 times
Trade-throughs are essentially transactions in which the trader bypasses the bid or offer price and instead buys a stock at a lower price. Between October 2008 and January 2013, BATS records showed that trade-throughs occurred 433,000 times on its stock exchange.
In addition, the company recorded almost 8,000 trade-throughs on its second stock exchange and another 617 in its options market. Additionally, more than 3,600 incidents involved violations of short-selling rules.
In addition to its stock exchange, Bats also operates several other markets, including the pan-European and European stock exchanges. The company is based in Lenexa, Kansas, and has offices in London, New York, Chicago, and Singapore.
The company was founded in June 2005 and opened its first pan-European market in October 2008. By October 2008, Bats had four U.S. stock exchanges and a global market for trading foreign exchange products. The company is now owned by Cboe Global Markets.
Short-selling violations occurred 617 times
In a recent report, the third largest stock exchange operator in the United States revealed that computers allowed traders to violate rules by making trades at inferior prices and engaging in short-selling. The violations affected two BATS equity exchanges and the options market. Overall, customers lost $420,360.
The short-selling violations occurred because computers at BATS accidentally permitted trades that were not allowed to occur. This is in direct violation of best bid and offer, the underlying principle of trading that ensures that investors receive the best prices. In 2011, BATS introduced a short-sale circuit breaker that limits short sales to their relative value to the national best bid.
Cboe owns BATS
Bats Global Markets is a stock exchange operator headquartered in Lenexa, Kansas, with additional locations in London, New York, Chicago, and Singapore. Founded in 2005, Bats is a competitor to the New York Stock Exchange and NASDAQ. In October 2008, it launched a pan-European stock market, adding to its growing list of international operations. It also publishes several specialized indexes.
In addition to the traditional stock exchanges, Bats has an active exchange-traded investment fund market. On February 26, 2010, it launched a new BATS Options Exchange and started trading the Apple contract (APPL). The company plans to capture a 4-percent market share in U.S. options in 2010.
Futures trading will be moved to Bats Global Markets
The company BATS Global Markets has announced that futures trading will be transferred to the company’s technology platform. The move will take place on April 30. The company purchased Chi-X Europe for $300 million and plans to migrate all of its European operations to its in-house platform.
This move will streamline operations and cut costs associated with technology maintenance. The move comes after a glitch in the system last week, which caused mayhem in the U.S. stock market and called into question the viability of BATS’s challenge to incumbent stock exchanges and the stability of high-speed trading.
Despite the disruption, Ratterman’s team has not given up. They are focused on refocusing their efforts on their growth strategy. Although they aren’t planning to take the company public anytime soon, BATS does plan to grow into new geographies and securities in the future. The most likely targets will be a foreign exchange, U.S. Treasuries, and futures, although the company isn’t ruling out other equity markets.