BATS Options Exchange Files for IPO

by OptionsZone Experts | May 13, 2011 9:41 am

Options trading investors could have more options when it comes to trading on options exchanges.

The operator of a small but quickly growing U.S. options exchange announced today it had filed the paperwork for an initial public offering.

BATS Global Markets, Inc. (BATS), a global operator of securities and derivatives markets, said it filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering of Class A common stock.

The BATS Options group claimed it had a 3.5% share of the U.S options market in April, up from .20 in February of 2010 when it officially opened. BATS’ U.S. operations are based in Kansas City, Mo.

The competition among the nine U.S. options exchanges is fierce. The Chicago Board Options Exchange (NASDAQ: CBOE[1]) typically leads in total market share of monthly trading volume, primarily because it holds a 95% market share in index options trading with proprietary products like the S&P 500 Index Options (CBOE: SPX[2]) and the CBOE Volatility Index (CBOE: VIX[3]).

However, the NASDAQ OMX Group (NASDAQ: NDAQ[4]), operator of the NASDAQ OMX PHLX and the NASDAQ OMX, often takes the lead in equity option volume, according to data from The Options Industry Council, an industry trade group. The NASDAQ OMX group held a 27.3% equity option market share in April, followed by the CBOE with 22.2%.

A third publicly traded options exchange operator is the NYSE Euronext (NYSE: NYX[5]). It runs the NYSE Arca and the NYSE Amex exchanges.

Total U.S. options trading volume in the first quarter came in at 1.485 billion contracts, up 16% from the same period a year ago, the OIC reported.

In April, executives announced they would open a 10th U.S. options exchange. Plans call for the Miami International Securities Exchange[6] to be operating by spring next year, according to Shelley Brown, senior vice president.

BATS Global Markets offers trading platforms for such national index products as the FTSE 100 for the United Kingdom, the CAC 40 for France, the DAX 30 for Germany, and the STOXX 50 for Europe.

In the U.S. BATS operates two stock exchanges, the BATS BZX and the BYX, along with BATS Options.

The number of shares to be offered in the IPO and the price range for the offering have not been determined. A portion of the shares will be issued and sold by BATS, and a portion will be sold by certain stockholders of BATS. The managers of the proposed offering will be Morgan Stanley, Citigroup and Credit Suisse.

Endnotes:
  1. CBOE: http://studio-5.financialcontent.com/investplace/quote?Symbol=CBOE
  2. SPX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SPX
  3. VIX: http://studio-5.financialcontent.com/investplace/quote?Symbol=VIX
  4. NDAQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=NDAQ
  5. NYX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NYX
  6. Miami International Securities Exchange: http://investorplace.com/39176/options-lunch-with-the-new-exchange-msft-iwm-vix-c-xlf/

Source URL: http://investorplace.com/2011/05/bats-options-exchange-files-for-ipo-cboe-nyx-ndaq/
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