Acquisition of the Year: CBOE

IRD/IMD Awards 2017

IMD/IRM Awards 2017 Acquisition of the Year

When CBOE Holdings acquired Bats Global Markets, a US and pan-European equities and options exchange operator, the potential for new market data offerings had customers eager to hear more. These expectations were probably what prompted readers to vote for the CBOE and Bats deal as Acquisition of the Year.

With CBOE’s options and futures data offering and Bats’ global equities and options business—as well as its foreign exchange (FX) business through Hotspot—it is no wonder the two companies were deemed a good fit. Catherine Clay, vice president, global head of information solutions at CBOE, says: “The combination [of CBOE and Bats] gives us great opportunities to leverage the global footprint across asset classes.”

The acquisition was completed on February 28 this year, and Clay says the new group is already exploring how to combine all of its market data. One of the first product enhancements clients can expect is improved liquidity identification, similar to the Bats Exchange-Traded Funds (ETF) Implied Liquidity Feed launched in June. “We’re working on an implied liquidity measure in options too,” says Clay, explaining that the ETF and options feeds could be combined to keep “friction out of the equation” and ensure there is minimum work for clients using both datasets.

Another area in which CBOE will leverage the acquisition is its Livevol Data Shop, a user-friendly market intelligence portal released last year that revolutionized access to customizable historical market datasets and lowered the per-unit cost of market data. One of the data types that will be added in the near future is historical FX data from Hotspot, via Bats. “Investors are expanding the products they’re trading. To be able to bring multi-asset class data to the end-user from one source is really exciting for us,” says Clay, adding that CBOE Livevol Data Shop has broadened the reach of market data services, making it more affordable for retail investors to backtest.

It is this focus on making a difference in the market that makes the CBOE/Bats marriage so promising. CBOE and Bats both have deserved reputations for being at the top of their game when it comes to innovation in market data, and the two share a common goal: “We have a shared philosophy of reducing the cost and friction of participating in capital markets,” says Clay.

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