Kansas City-based ECN BATS Trading has launched an aggressive pricing
plan for the month of January 2007 in an effort to attract more volume. It will temporarily invert the conventional pricing model by paying liquidity providers rebates higher than the fee charged to liquidity takers.
According to newswire reports, from January BATS will charge $0.0020 per share for removing liquidity or routing to other market centres, and will rebate $0.0030 per share for adding liquidity in stocks priced above $1. The pricing plan, which begins on 2 January, will remain in place for the full month or until BATS volume for January reaches 5 billion shares, whichever occurs first.
“With a far lower operating overhead than Nasdaq, BATS is well-positioned to take price competition to a new level,” says Chief Executive Officer Dave Cummings. “As we celebrate our first anniversary 27 January, this is our way of rewarding our subscribers for connecting to BATS. BATS spent 2006 working to get several of the large broker-dealers connected to the network. The special January pricing is designed to create a snowball effect and push BATS to critical mass.”
His definition of “critical mass”
is 10 per cent of OTC volumes.
BATS Trading reported its first 150-million share trading session in November 2006 and consistently accounts for 4%-6% of daily Nasdaq-listed market volume. Investors in the company include Credit Suisse, Getco LLC, Lehman Brothers, Lime Brokerage LLC, Morgan Stanley and Wedbush Inc.