Better Alternative Trading System
From Wikipedia, the free encyclopedia
The Better Alternative Trading System, better known as BATS, is the third largest share trading electronic communication network in the US financial system after NASDAQ and NYSE Arca. It was founded by David Cummings and incorporated in June 2005.
[edit] Market Share
BATS's trading volume has become a major competitor to NASDAQ and NYSE Arca for trading volume on NASDAQ-listed or Tape C securities. In January 2007, BATS offered an inverted liquidity fee/rebate structure (see below) that managed to draw over 10% of the share volume in NASDAQ-listed securities. In early 2007, BATS started trading New York and regional listings (Tape A and Tape B), but it has not yet captured a significant amount of market share. As of 1 March 2007, BATS accounts for about 1 in every 30 shares traded in the US financial system. For Tape C securities, its market share is around 7.5% of trading volume. For Tape A securities, its market share is less than 1%.
[edit] Fees
BATS has a narrow spread between the liquidity removal fees it charges and the liquidity addition fees it pays to traders. It as a single pricing structure for all securities. Traders that remove liquidity from the BATS book pay $2.60 per 1,000 shares. Traders that add liquidity to the BATS book receive $2.40 per 1,000 shares. Externally-routed orders are charged $2.60 per 1,000 shares. BATS neither charges fees nor pays rebates on stocks priced below $1.00.
