Better Alternative Trading System
Better Alternative Trading System (BATS) is the third-largest share trading electronic communication network in the U.S. cash equities system, trailing only NASDAQ and NYSE Arca. The company is led by President and CEO Joe Ratterman, who replaced founder Dave Cummings July 1, 2007.
The company, which is pursuing formal STOCK exchange status, was created in June 2005 in Kansas City, Missouri. Kansas City remains the company's headquarters though it has a sales office in New York City. BATS first handled volume of more than 500 million shares in a single day on July 24, 2007.
Market Share
In a very brief period of time, BATS has become a major competitor to NASDAQ and NYSE Arca, particularly on NASDAQ-listed or Tape C securities. In January 2007, BATS offered an inverted liquidity fee/rebate structure (see below) and managed to gain more than 10% of the share volume in NASDAQ-listed securities. As of June 2007, under its normal pricing schedule, the company has maintained AbOUT 12% of Tape C market share.
In early 2007, BATS started trading New York (Tape A and regional listings Tape B), and currently handles about 2% and 6%, respectively, of these securities. As of mid-June 2007, BATS averages volume of more than 300 million shares a day, which includes Tape A, B and C securities.
Fees
BATS has a narrow spread between the liquidity removal fees it charges and the liquidity addition fees it pays to traders. For Tape A and C securities, traders that remove liquidity from the BATS book pay 24 cents per 100 shares while traders that add liquidity receive 22 cents per 100 shares. All externally-routed orders are charged 26 cents per 100 shares. BATS neither charges fees nor pays rebates on stocks priced below $1.00.