BATS, the third largest stock exchange in the United States, is creating a new options exchange. BATS plans to take volume away from the other U. S. option exchanges by charging very low execution fees based on a "Maker / Taker" structure.
A "Maker" is someone who submits a limit order to the exchange thereby providing liquidity to the market. A "Taker" is someone who submits an order to the exchange which is immediately executable, thereby taking liquidity away from the market. Maker / Taker fees are frequently structured so that "Makers" receive a rebate on their order, while the "Taker" pays a fee to the exchange.
In other option exchange related news, the CBOE is planning a second options exchange of their own. The exchange, which is awaiting SEC approval, will be aimed at high frequency trading firms and will go live later this year.
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