Traders magazine reports that BATS has launched a new feature that points to the future of the options market. It now provides a "bulk quoting" interface that will allow dealers two advantages: It will allow market makers to provide a bid and an offer in a single message rather than two, and it will allow market makers to bundle several quote updates into one message.

This will likely prove attractive immediately. The fact is that the stock markets move extremely fast, necessitating equally fast action in the options market. So the need to constantly cancel quotes and replace quotes at a different price point is becoming more acute. At least one other exchange, the Nasdaq Options Market, also intends to launch this sort of functionality soon. We wouldn't be surprised to see others follow suit.

In one sense, this serves as another indication that the options market is following the equities market in terms of trading and the trading infrastructure. Which raises a question: Will we eventually run into the same sort of cancelled quote controversy that now dogs the stock market? In the wake of the May 6, 2010 Flash Crash, cancelled quotes became a big deal, as the sheer volume of such quotes has raised brows. Some have gone so far as to propose a fee on cancelled quotes. In the options markets, cancelled quotes have not been an issue so far, but if high-frequency trading ever takes hold, it just might. Whether that's rational or not is another issue.

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