Better Alternative Trading System - Explained
What is a Alternative Trading System?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is a Better Alternative Trading System?
The Better Alternative Trading System (BATS) is a stock exchange founded in 2005. BATS is based in the United States, it offers foreign exchange services to investors and traders as well as equities and options. The better alternative trading system was approved by the Securities Exchange Commission (SEC) and it has its operations in the U.S and Europe.
How Does the Better Alternative Trading System Work?
The BATS became an actual stock exchange in 2008 when it entered the European market but it was founded in 2005. after entering the market in 2008, a BATSexchange was launched in both London and the U.S. the offerings of the BATS include options equities and foreign exchange. Given the uniqueness of the BATS and the services it offers, it was renamed as BATS Global Markets and regarded as an alternative trading platform by investors. As a reputable stock exchange, BATS competed with established exchanges such as the Nasdaq and the New York Stock Exchange (NYSE) and by 2016, BATS was ranked the second-largest equity exchange in the U.S. BATS operates in both Europe and the United States. Investors and traders can trade options and stocks in this exchange. In October 2008, BATS BZX was launched as a registered exchange while BYX two years after. BATS is considered innovative amongst other exchanges which was why it acquired many exchanges between 2011 and 2015 including Chi-X Europe and Hotspot ECN. Despite its innovative nature, BATS has encountered many challenges over the YEARS. After an effort to go public in 2012, BATS in 2013 encountered an error which led to multiple trades executed below the best bid and offer leading investors to engage in short-sellings. As of 2017, BATS was acquired by CBOE Holdings.