Direct Edge
| Company type | Private |
|---|---|
| Industry | Stock exchange |
| Predecessor | Attain (ECN) |
| Founded | 1998 |
| Fate | Merged with BATS Global Markets in 2014 |
| Headquarters | Jersey City, New Jersey , United States |
Area served | United States |
| Products | EDGA Exchange, EDGX Exchange |
Direct Edge was a U.S.-based stock exchange that managed two trading platforms: EDGA Exchange and EDGX Exchange. Situated in Jersey City, New Jersey, it combined forces with BATS Global Markets in 2014.
Beginning in March 2009, Direct Edge consistently accounted for between 9% and 12% of the total U.S. equities trading volume, frequently handling one to two billion shares each day. It vied with BATS Trading as the third-largest stock market in the United States, trailing only the New York Stock Exchange and NASDAQ.
Origin as ECN
Established in 1998 under the name Attain as an electronic communication network (ECN), its assets were purchased by Knight Capital Group in 2005 and subsequently rebranded as Direct Edge ECN in 2007. This spin-off introduced new leadership and ownership stakes, including investments from partners such as Citadel Derivatives Group and Goldman Sachs. In 2008, operational control of the stock exchange division of the International Securities Exchange was transferred to Direct Edge in exchange for a 31.5% ownership interest.
On March 12, 2010, the U.S. Securities and Exchange Commission (SEC) granted approval for Direct Edge to transform its EDGA and EDGX ECN platforms into fully recognized national securities exchanges. By July of that year, Direct Edge phased out its ECN platforms along with the ISE Stock Exchange, thereby establishing what became one of America’s newest stock exchanges.
Key Developments from 2009 to 2011
- On February 10, 2009, Direct Edge achieved a milestone by matching over one billion shares in a single day.
- In August 2009, it recorded a peak market share of 12.9%.
- By March 2009, Direct Edge surpassed BATS Trading in monthly matched market share, securing its position as the third-largest U.S. stock market operator for nearly a year.
- The launch of its two stock exchanges, EDGA and EDGX, occurred on July 21, 2010.
- In November 2011, Direct Edge revealed intentions to establish a stock exchange in Rio de Janeiro, Brazil, aiming for an opening late in 2012.
Merger in 2014
On January 31, 2014, Direct Edge merged with BATS Global Markets. The unified company continued operations under the BATS Global Markets brand.
Trading
Direct Edge facilitated trading for all U.S.-listed equities across:
- Tape A – securities listed on NYSE
- Tape B – securities listed on NYSE Arca/Amex
- Tape C – securities listed on NASDAQ
The EDGX platform employs a maker/taker pricing structure that provides substantial rebates to liquidity providers, whereas EDGA utilizes a taker/maker framework emphasizing lower transaction costs.
Trading sessions extend from 8 a.m. to 8 p.m., with the standard trading hours spanning from 9:30 a.m. to 4 p.m. On the Security Information Processor (the public quote feed), EDGA is designated by the symbol “J” and EDGX by “K.”
See also
- List of former stock exchanges in the Americas
- List of stock exchange mergers in the Americas
- List of stock exchanges
- Flash trading