Bats Global Markets announced it is set to extend its options business in the US with the launch of ‘Bats Auctions Mechanism’, otherwise known as BAM.
The options auctions will provide users with alerts at the start of auctions, to allow “price improvement opportunity” and agency orders to trade against the contra party specified by an initiating member.
The auctions will run throughout the trading day on Bats’ options exchange, EDGX, which was launched last year.
A new feature will also be introduced, which provides an “incentive” to ensure market participants maintain two-sided quotes, which Bats said helps keep bid-ask spreads tighter in continuous market trading.
Head of US markets at Bats, Bryan Harkins, said the launch is a “natural evolution for the Bats options business.”
He added that Bats plans to “aggressively expand [its] product suite to deepen liquidity and improve the execution experience for market participants in the coming months.”
BAM is due to launch in November this year, subject to approval from the Securities and Exchange Commission.