DOW JONES NEWSWIRES
BATS Global Markets plans to launch a U.S. equity options
exchange by early next year as the fast-growing operators BATS
Exchange and BATS Europe look for growth in a new market
segment.
BATS Exchange, launched in 2006, has steadily taken trading
volume of stock listed on the New York Stock Exchange and Nasdaq
Stock Market. BATS got approval last August to launch its own stock
exchange, putting it in more direct competition with the two owned
by NYSE Euronext (NYX) and Nasdaq OMX Group Inc. (NDAQ).
The options business has become a focus for Nasdaq OMX following
its July 2008 acquisition of the Philadelphia Stock Exchange, which
has made Nasdaq OMX the third-largest U.S. options market operator
behind the Chicago Board Options Exchange and the International
Securities Exchange.
Meanwhile, NYSE Euronext recently decided to reduce, and in some
cases eliminate, fees it charges investors who trade options on its
exchanges, following in the footsteps of several exchanges that are
revamping their pricing models.
New electronic platforms like BATS and Direct Edge have been
attracting algorithm-driven investment firms and proprietary
trading groups with a combination of fast executions and attractive
pricing. BATS said Jeromee Johnson, who was hired as BATS
Exchange's vice president of market development in April 2009, will
be heavily involved in the new platform. He was previously
president of 3D Markets, a provider of software and technology for
institutional options trading.
The exchange says it has captured nearly 12% of the U.S. equity
market share in the past 3 1/2 years, while its BATS Europe trading
platform is trading 4% to 8% of major European stock indexes.
BATS' owners include affiliates of large banks and Wall Street
brokers, including Citigroup Inc. (C), Credit Suisse Group (CS),
Deutsche Bank AG (DB) and Morgan Stanley (MS).
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com