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Bats to launch BAM options auctions

First Published 2nd August 2016

Bats Global Markets plans to launch the Bats Auction Mechanism (BAM), new functionality to provide price improvement opportunities for orders sent to its EDGX Options Exchange.

Kansas City and New York - Bats plans to launch BAM in November, pending SEC approval.

BAM is an options auction process that provides Members with an opportunity for price improvement for the Member's client orders. The BAM functionality alerts all Members at the start of an auction in order to maximize the price improvement opportunity and allows agency orders to trade against the contra party specified by the initiating Member or other Members responding to the auction.

In addition, Bats will introduce a new feature called the Priority Quote Allocation. This functionality provides incentives for a broader range of participants to maintain two-sided quotes, intended to keep tighter bid-ask spreads in continuous market trading.

BAM will run continuously throughout the trading day on EDGX, the pro-rata Bats' options market launched in November 2015.