BATS Trading Warns of Spikes in Market Data Messages

Ivy Schmerken, Wall Street & Technology

BATS Trading, operator of BATS (Better Alternative Trading System) ECN, warned participants that receive the BATS PITCH market data that it expects message activity levels to increase - partly due to systems changes related to Reg NMS - and customers may want to increase their bandwidth."The amount of trading volume and order activity on BATS increased dramatically on 3Q2006. While difficult to predict exactly, we expect message activity to continue increasing," wrote BATS President and CEO Dave Cummings in an e-mail to subscribers dated Oct.16. Cummings also wrote in the e-mail that some of the systems changes BATS is working on to prepare for Reg NMS will increase PITCH message activity as well.

Currently, BATS recommends a minimum of T- (1.544 Mbps) to receive BATS PITCH market data. However, subscribers concerned about performance during spikes will want to use 3 Mbps or more, according to Cummings' e-mail.

During spikes in quote updates, subscribers using a single T-1 will experience queuing of their market data. In addition, customers using the same T1 to both receive quotes and transmit orders should also expect their orders to be slightly delayed, stated the CEO in his e-mail. "Many subscribers will find these delays unacceptable and may wish to upgrade to 3 Mbps or more to reduce these serialization delays," he further stated in the e-mail.

According to a table showing bandwidth statistics for BATS PITCH market data, three times during the busiest day in September the PITCH bandwidth exceeded T-1 capacity for a single second.

In other news, BATS named Ken Conklin VP of Sales. Conklin was part of the original development team that built and launched BATS ECN. He was sales manager for BATS Trading in 2006. Prior to that, he was a software developer for TradeBot Systems, an automated liquidity provider that gave rise to BATS Trading. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio