NEW YORK, May 28 (Reuters) - BATS Trading Inc., the third largest U.S. equities market, on Wednesday will begin offering real-time stock quotes free of charge to Yahoo Finance’s 19 million users in its latest effort to gain market share from the New York Stock Exchange and Nasdaq.
BATS, which is expected to obtain exchange status later this year, already accounts for some 9 percent of U.S. equity trading, averaging 590 million shares in the past five days compared with the NYSE’s NYX.N 1.2 billion shares and Nasdaq’s (NDAQ.O) 2 billion shares, according to BATS’ website.
Kansas City, Missouri-based BATS, which offers its market data free to its users, has been able to take market share from the two major U.S. exchanges with lower transaction fees on U.S. cash equities trading.
It is now replicating that strategy for lucrative market data fees, which generate more revenue for the New York Stock Exchange and Nasdaq than U.S. cash equities trading.
NYSE Euronext now derives 14 percent of its revenue from market data and only 10 percent on U.S. cash trading, while Nasdaq-OMX gets 20 percent of its revenue from market data and 15 percent from transactions.
“We are trying to put pressure on the market center community to reduce fees for market data,” said Randy Williams, BATS’ Vice President of Sales and Communications. “The market shouldn’t have to pay to see quotes.”
Yahoo YHOO.O said in a statement it plans to use BATS’ data in its order books, portfolio and multi-quote features. (Reporting by Phil Wahba; Editing by Derek Caney) (email@example.com; +1 646 223 6128)