US equities exchange BATS Trading’s matched market share dipped to 10.37% in November from 11.44% in October. But the exchange still expects to win 20% of the US market by the end of 2009, and could still hit its 2008 year-end target of 15%.
Randy Williams, vice president of sales and communications at BATS, attributed the November fall to the platform’s conversion into a full exchange from an electronic communications network (ECN), which was completed on 6 November. “The declines in November were expected because it takes time for some of our clients – especially the bigger ones – to convert from BATS ECN to BATS Exchange,” Williams told theTRADEnews.com.
BATS users needed to complete new membership agreements to allow them to trade on the platform when it changed status. Clients have also had to adapt their smart order routers to account for the fact that BATS, as a full exchange, now submits quotations directly to the US consolidated tape. ECNs are required to send quotations to the tape via a full exchange. BATS had been using the National and ISE stock exchanges. Williams added that it has taken some users time to get used to looking for BATS quotations under its new symbol, ‘Z’, on the tape.
Williams believes the effects of these changes are already wearing off. He said BATS’ matched market share on 3 and 4 December was around 11.2%. Although this is a long way from the firm’s previously-stated year-end target of 15%, Williams thinks it could still be in reach. “We wouldn’t be surprised to hit it since the true ramp-up really started this week,” he said. He also described the 15%
market share as a “stretch goal” rather than an expected one.
Williams said BATS sees no reason to change its goal of a 20% matched market share by the end of 2009. “Things are really moving well right now,” he said. “We’ve nearly doubled our subscriber base in the past year, and we see lots of additional volume headed our way.”