BATS Global Markets (BATS) has received approval from the US Securities and Exchange Commission (SEC) to launch its second options market – EDGX Options. BATS is planning to open the new market on Monday, 2 November, 2015.
EDGX Options will be based on a customer priority/pro rata allocation model and is designed to complement its BZX Options market, the fourth-largest US options market with a record 10.8% market share in July, which is a pure price-time priority market. 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.
“We are pleased to receive approval from the SEC to launch EDGX Options and we are looking forward to making our mark in a new segment of the options market,” says Bryan Harkins (pictured), Executive Vice President and Head of US Markets at BATS. “Two-thirds of US options market volume is executed on exchanges with a pro rata model and we believe we can help make markets better for participants in this segment of the market through our innovative technology, operating efficiency, market-leading pricing, and first-class customer service.”
EDGX Options will be located in the Equinix NY5 data centre along with the other BATS US equities and option markets and its newly acquired institutional foreign exchange ECN, Hotspot. The technical specifications for the EDGX Options are available on the EDGX Options information page on the BATS website, and members can begin connecting to the new market on 17 August, 2015. BATS will be offering numerous testing opportunities leading up to the planned launch date as outlined in the EDGX Options Roadmap and Schedule.
BATS expects that all of the industry’s multiply-listed options will be available for trading on EDGX Options. EDGX Options 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 minimise the technology effort required for existing Exchange Members to begin trading on EDGX Options.
