How Bats Made Markets Better

April 1, 2023

Bats was founded with one simple goal in mind: making markets better.  

In the early 2000s, the founding members of Bats were working at Tradebot Systems, a trading firm, and saw a duopoly in U.S. equities markets that stifled competition in the markets. And so, 13 people, including Cboe’s COO Chris Isaacson, began looking for a way to shake up the exchange industry and inject more competition into the U.S. equities market. 

The exchange technology at the time was subpar and, primarily having backgrounds in engineering and technology, the group knew they could create a better technology system that delivered what the market needed and what traders wanted. 

Bats launched as an alternative trading system (ATS), with a commitment to great technology and aggressive pricing. 

“Our tagline was ‘Making markets better with great technology and aggressive pricing’ and we were truly all-in on that mission,” Chris says. “Even though we knew we were onto something, people were hesitant to connect to a new ATS, so it took a lot of shoe leather to get customers.” 

Bats become a full-fledged exchange in 2008 after an intensive Securities and Exchange Commission (SEC) approval process. 

“People did not think the SEC would approve another exchange,” says Chris. “They had not approved a new exchange in many years so there was no guarantee we would receive approval, but we were confident in what we had to offer.” 

Fast forward, eight years later in 2016 Bats went public and Cboe took notice. 

“It was the first-time people could see our financials and I think people were surprised we could be competitive in the equities market and have such high margins,” Chris says. “As Cboe looked to expand its offerings I think we stood out because we had proven ourselves as competitive and profitable while sticking to our mission to make markets better.” 

Cboe completed its acquisition of Bats in 2017, ultimately kicking off a period of rapid expansion and acquisitions that propelled Cboe to the world stage.