Oops, they did it again.
BATS Global Markets has announced they are opening a second U.S options marketplace, EDGX Options.
According to BATS, EDGX Options will be based on a customer priority/pro rata allocation model. The new exchange will complement the BZX Options exchange, BATS’ first options market (previously called BATS Options), which is a price-time priority market.
The target date for the opening of the newest BATS marketplace is November 2015, pending SEC approval.
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, the exchange said in a release.
See the options filing for EDGX
“With two-thirds of U.S. options market volume executed on exchanges with a pro rata model, we see a big opportunity to bring our innovative technology, operating efficiency, market leading pricing, and first-class customer service to help make markets better for participants in this segment of the market,” said Bryan Harkins, executive vice president and head of U.S. markets at BATS. “We are excited to build on our options momentum with the launch of EDGX Options, which we believe will complement our existing innovative BZX Options market.”
See an overview of the U.S. Options Marlketplace
BATS expects that all of the industry’s multiply-listed options will be available for trading on EDGX Options. Details regarding the fee schedule, launch date, rollout, technical specifications and testing schedule for EDGX Options will be announced at a later date.
In contrast, BZX Options is a pure price-time priority market with a maker-taker pricing model that trades all multiply-listed equity options available for trading in the U.S. BZX Options market share was 9.4% in March, more than doubling from 4.1% a year ago.
As with the BZX Options market, EDGX will operate out of the Equinix NY5 data center. By having both options’ bourses, as well as its other stock markets located at Equinix, existing BATS users can more easily connect to with minimal technology costs.
