New home for BATS markets
Following its merger with Direct Edge, Bats Global Markets has consolidated all of its markets in the U.S. at one data center, the NY5 facility in New Jersey operated by Equinix. That includes the company’s all-electronic equity options exchange, which has been climbing rapidly up the industry rankings in recent months.
Bats officials said the migration to the Equinix facility, which took place in several stages earlier this year, was driven primarily by the desire to put all of its markets on a common platform, which simplifies connectivity and reduces infrastructure costs for its customers. But the move also resulted in a significant reduction in the amount of time it takes for Bats to process order messages, which run into the millions per second during peak trading times. Latency for Bats Options was cut by more than half following the move to the Equinix facility, the officials said.
Over the last 12 months, Bats Options has captured an increasingly large share of trading in single stock options in the U.S. In April, Bats Options captured 10.8% of the market, the fourth largest among the 12 U.S. options exchanges. That compares to just 4.6% of the market in April 2014. The exchange was launched in February 2010 and operates on a price-time priority model with maker-taker pricing. Later this year the company plans to launch a second options exchange with a customer priority/pro rate allocation model, similar to what several other options exchanges offer.
The NY5 facility also houses the four equity markets operated by Bats, which have a combined market share of more than 20%. And later this year Bats plans to move Hotspot FX, the currency market it acquired in March from KCG Holdings, to the same facility.
