When BATS was first established in 2005, it was the first stock exchange of its kind in the United States. Founded in the United States, BATS provides investors and traders with foreign currency, equity, and option trading services. The Securities and Exchange Commission (SEC) has authorized the improved alternative trading system, which operates in the United States and Europe.
What Is the Purpose of the Better Trading System?
The BATS was formed in 2005 but only became a stock exchange in 2008 when it began trading in Europe. The first BATS exchanges opened in London and the United States in 2008. Options, stocks, and foreign exchange are all available through the BATS. Investors view BATS Global Markets as an alternative trading platform because of the company's distinctiveness and the services it provides.
By 2016, BATS was the second-largest equities exchange in the United States, competing with established exchanges like Nasdaq and the New York Stock Exchange (NYSE). BATS have operations in both the United States and Europe. Options and stocks can be traded here by investors and traders. As a registered exchange, BATS BZX debuted in October 2008, while BYX followed two years later.
Between 2011 and 2015, BATS purchased many exchanges, including Chi-X Europe and Hotspot ECN, since it is regarded as innovative exchange. BATS have faced several hurdles throughout the years, despite its creative character. The issue occurred in 2013 after BATS attempted to go public in 2012, resulting in several short-selling deals being conducted below the best bid and offer. CBOE Holdings purchased BATS in 2017.
The Cboe vs. The BATS
Over the years, BATS has encountered several significant technological difficulties. As an initial public offering (IPO) in 2012, the firm offered shares on its exchange. A difficulty with the company's IPO led to a price drop from $16 per share to just $0.04 per share. 10
A miscalculation by the corporation in 2013 caused hundreds of thousands of deals to execute at prices lower than the best bid and offer, affecting both long and short-term shareholders alike. The inaccuracy impacted trading records dating back four years. An offer to buy Bats Global Markets was made by Cboe, the owner of Cboe Options Exchange and Cboe Futures Exchange, in 2017.
Adding foreign currency and ETFs to Cboe's products was made possible by the purchase, which allowed Cboe to grow into Europe. Four U.S. options markets, Cboe Futures Currency, a European equities market, four U.S. equity markets and a foreign exchange market are now part of Cboe's portfolio of products. 12 When Cboe acquired Bats, it brought three of its previous exchanges over to the Bats trading platform.
An Example of Bats's Global Markets
Bats Global Markets was positioned as an alternative trading system (ATS) for investors when it was initially introduced in 2005. The Securities and Exchange Commission (SEC) remained in charge of the alternative exchange, but it provided investors with a wider range of trading and counter-trading choices. 1 CBOE Holdings Inc. paid $3.4 billion for Bats on March 1, 2017. Bats joined the world's second-largest U.S. stock market.
When Bats entered the European market in 2008, it shot to the top of the worldwide exchange market. Bats are currently one of the world's top U.S. equity exchanges, thanks to its affiliation with the Chicago Board Options Exchange. Because of the combined size of the two businesses, operational savings were gained. The New York Stock Exchange and the Nasdaq became more competitive due to CBOE's expansion.
BZX, BYX, EDGA, and EDGX were the four US stock exchanges on the former BATS platform. As the largest pan-European stock exchange, BATS ran options trading and Chi-X Europe. 3 There are now four CBOE options exchanges: Cboe BZX and Cboe Options, all of which have been absorbed by the other three. 4 The Chicago Board Options Exchange's operating expenses have been reduced thanks to CBOE's use of the Bats advanced order matching technology.
Investing for Individuals: What This Means
Bats are no longer an independent exchange but one of the world's leading exchange operators as part of the CBOE. On the CBOE, it has incorporated its cutting-edge electronic trading system. 3 Individual investors have been able to get a taste of European markets thanks to it.
It was in 2011 when BATS bought the largest cross-border trading facility in Europe, Chi-X Europe Limited—which traded over 15 major European markets with only one platform and rulebook compared to the Deutsche Bourse or the London Stock Exchange.
NYSE Euronext is the world's largest stock exchange, but the Bats and Direct Edge exchanges trade more shares than the Nasdaq. The acquisition of Hotspot by Bats in 2015 pushed the company into the foreign exchange market. CBOE is currently the second-largest U.S. options market by volume after incorporating Bats technology into the CBOE trading platform in 2017.
