Bats Global Markets Inc. is going after ICAP Plc as it seeks to broaden its foreign-exchange business.
The Bats Hotspot FX currency market will offer free trading of gold and silver against the dollar beginning May 1, and that pricing will last at least through the end of 2015, according to a statement on Tuesday.
The markets run by Bats and ICAP already compete in currencies, with ICAP’s EBS platform handling more than three times as much trading in March. Though considered commodities, gold and silver have long been closely linked to currencies. EBS already lets customers buy and sell the precious metals.
The trading promotion is the latest salvo under Bats Chief Executive Officer Chris Concannon, who said in March that the company is taking on another currency market: the one owned by Thomson Reuters Corp. Concannon became CEO last month.
“Our ‘Free Gold’ offering is consistent with the aggressive pricing promotions Bats has strategically offered customers across our equity and options trading platforms,” Concannon said.
Bats, based in Lenexa, Kansas, operates Europe’s biggest pan-European stock market and has the second-biggest share of U.S. equity trading.
“Bats has had a history of being aggressive in pricing to build initial market share in the past,” said Rich Repetto, an analyst at Sandler O’Neill & Partners LP. “They’re going to grow Hotspot aggressively in Europe. It hasn’t really gotten traction there.”
The company completed its $365 million acquisition of Hotspot FX this year, its first foray into currencies. It plans to open a hub in Slough, England, later in 2015. Hotspot’s average daily trading amounted $31.5 billion in March, versus $114.5 billion at EBS. (Bloomberg LP, the parent company of this news organization, also operates a currency platform.)