SAPINOVER OS v2.0 :: INITIALIZING...
000%
Nasdaq is buying LeveL. Cboe bought BIDS in January 2021. The two assets are opposite businesses, and the reason to own either one is about to change.
When we wrote about Nasdaq's agreement to acquire LeveL Markets, we treated it as an unusual event. It is, but not an unprecedented one. There is exactly one prior case of a US exchange operator buying an NMS Stock ATS outright, and it is close enough to be instructive.
Cboe Global Markets completed its acquisition of BIDS Trading in early January 2021. Cboe described BIDS as the largest block-trading ATS by volume in the United States, said the purchase price was not material, and disclosed that BIDS had generated roughly $41 million of net revenue in the twelve months to September 2020. The strategic rationale was stated plainly at the time: the deal gave Cboe a foothold in the off-exchange segment, which even then accounted for more than forty percent of US equity volume. It followed a partnership the two firms had run in Europe since 2016.
Five and a half years later, the second-largest US exchange operator is doing the same thing. Same category of buyer, same category of target, radically different market conditions. The comparison is worth making precisely because the two assets are not alike.
Both are called dark pools. In the data they are opposite businesses. Measured across the 32 complete FINRA reporting weeks from 2025-12-15 to 2026-07-20, meaning weeks where both tiers had published and the market-wide totals are whole:
Figure 1 · The same label, opposite businesses
Four measures, LeveL on the left and BIDS on the right, each row scaled to its own larger value.
LeveL carries 7.96% of all ATS notional against 3.73% for BIDS, and reaches 13,238 symbols against 10,394. But the number that matters is the print. BIDS averages 551 shares and $34,194 per execution. LeveL averages 43 shares and $2,964. That is a factor of 12.9 in size, and it runs the other way in count: LeveL does 25 times as many trades on roughly twice the notional.
Figure 2 · Where each venue sits
Average print size against share of ATS notional, for the largest venues. The two acquisition targets sit at opposite ends of the same market.
So Cboe bought size and Nasdaq is buying flow. A block venue is a service business: relatively few executions, each negotiated, each large, revenue tied to the presence of natural counterparties on a given day. A continuous crossing book is an infrastructure business: constant small executions across nearly the whole tape, revenue tied to connectivity and habit rather than to any individual trade.
That difference shows up in stability, which was the core of our original piece. LeveL's weekly share varies with a coefficient of variation of 0.030. BIDS runs at 0.105, roughly three times as volatile, which is exactly what a block business looks like when one large week lands or fails to.
The strategic logic is the same in both cases and it is a defensive one. Lit exchange market share in US equities is mature, contested and expensive to move. The three exchange families have spent two decades competing for it with pricing, colocation and order types, and the marginal point of share costs more than it returns.
Off-exchange volume is not mature in the same way, and it is large. Cboe used the forty-percent figure in 2021 and the direction has not reversed since. An exchange operator that cannot profitably grow its lit share can still grow its share of US equity execution by owning venues on the other side of the line.
The concentration data makes the point sharper. Across 36 reporting NMS Stock ATSs, the top five hold 51.0% of notional and the top ten hold 71.9%. This is not a fragmented market where share can be assembled cheaply. There are perhaps six or seven venues worth owning, most of them captive bank pools that will never be for sale. LeveL and BIDS were among the few large, genuinely independent, broker-neutral books available to a buyer.
If the Nasdaq transaction closes, the two exchange-owned pools would together account for 11.69% of off-exchange notional. That is a meaningful share of the segment to sit inside exchange holding companies, and it is a change in the structure of the market rather than merely a change in ownership.
Here is the part that separates 2026 from 2021, and the reason we think the timing of the Nasdaq deal is not incidental.
In June the SEC proposed rescinding Rule 611, the trade-through rule, along with Rule 610(e) on locked and crossed markets. The comment file closed on August 17. We read all 172 records the Commission hosts: Rule 611 appears in 95 percent of substantive letters and 610(e) in about three quarters, and the professional center of gravity is conditional rather than opposed.
Rule 611 is what gives a displayed quotation its compelling force. It requires order flow to respect the best displayed price wherever that price sits, which is the mechanism that converts an exchange's quote into an entitlement to interact. Remove it and the quote becomes information rather than an obligation.
In a market without that obligation, routing decisions rest more heavily on relationships, measured execution quality and negotiated terms. Many practitioners expect the consequence to be growth in bilateral arrangements: more internalization, more negotiated liquidity, more access structures that were pointless while the trade-through rule made the lit quote unavoidable.
That is precisely the environment in which owning an off-exchange venue is worth more than owning a faster matching engine. An exchange operator holding a large, broker-neutral ATS owns a relationship layer and a routing habit that does not depend on the protected quote surviving. Read that way, both acquisitions are hedges against the same regulatory outcome, one placed five years early and one placed five weeks before the comment file closed.
There is a second reason, and it is the one we would watch most closely, because it is the only part of US equity market share that is not yet spoken for.
The overnight session is small. Measured on the same complete weeks, the three overnight-dedicated ATSs, BOATS, Bruce and Moon, together account for 2.18% of all ATS notional, or $636B. That is a rounding error against a market where the top five venues hold half of everything.
It is also growing faster than anything else in the off-exchange market.
Figure 3 · The one pool still up for grabs
Overnight-dedicated ATS venues as a share of all ATS notional, first eight weeks of the window against the last eight.
The overnight venues went from 1.51% of ATS notional in the first eight weeks of the window to 2.96% in the last eight, a rise of about 97 percent in roughly seven months. No mature venue in this market moves like that, because mature venues are fighting over allocated share. Overnight share is not allocated yet.
Note what the overnight session is made of. Every venue in that chart is an ATS. That is not an accident of history: the exchange rulebook is heavier in those hours, with quotation obligations, auction mechanics and protected-quote duties that an ATS simply does not carry, which is why 24X required exemptive relief to operate as an exchange overnight while three ATSs were already trading. An exchange operator that wants to be present in a 24-hour market has an easier path through an ATS than through its own rulebook.
Which is what makes Nasdaq's framing of the LeveL deal worth rereading. It described an always-on market, and announced the acquisition alongside a new business unit, Digital Liquidity Networks, built to house it. On our reading that is not a tokenization story with an equities venue attached. It is an exchange acquiring a wrapper that can trade at hours its own rulebook makes awkward, in a segment where market share is still being created rather than merely traded between incumbents.
Put the two forces together and the logic compounds. If Rule 611 goes, execution moves toward relationships and bilateral terms, which favors whoever owns the venue and the routing habit. If the session extends toward 24/5, an entirely new pool of share opens in the one wrapper that can reach it without a rulebook rewrite. An exchange that owns a large, neutral ATS is positioned for both. An exchange that owns only its own order book is positioned for neither.
One precedent is not a pattern. Cboe and BIDS is a single prior transaction, in a different rate environment, at a price Cboe called not material, involving a venue with a fundamentally different business model. Reading it as a template for what Nasdaq is doing is an interpretation, and two data points can always be connected by a line.
Rescission may not happen, or not in this form. The comment file is genuinely split. Several exchanges support rescission only with conditions, at least one major wholesaler opposes it outright, and the asset managers largely asked the Commission to slow down. A threshold-based or phased outcome is realistic and would blunt the bilateral thesis considerably.
The overnight growth rate cannot continue and may not be structural. Doubling from a base near one and a half percent is easier than doubling from ten. Part of that rise reflects venues maturing and adding symbols rather than genuine demand migration, and a single volatile stretch of overnight sessions can move a seven-month trend line materially at this scale.
Exchanges may buy ATSs for duller reasons. Revenue diversification, an accretive multiple, a technology team, or a customer list are all sufficient motives on their own, and none requires a regulatory thesis. The market-structure reading is ours, and neither company has framed it this way.
The window. All venue figures come from FINRA Rule 4552 ATS Transparency Data at the security level, across 32 complete reporting weeks from 2025-12-15 to 2026-07-20. FINRA publishes Tier 1 on roughly a two-week lag and Tier 2 on roughly four weeks, so any week missing Tier 2 market-wide is excluded entirely rather than partially counted. This is the same method as our original LeveL piece, so the two are directly comparable.
A trap worth naming. The MPID LATS belongs to The Barclays ATS, not to LeveL. LeveL ATS reports as EBXL. A first pass of this analysis matched on the wrong ticker and produced an entirely incorrect comparison before the venue name was checked. Any venue-level work on this dataset should resolve MPID to ATS_Name before drawing a conclusion.
On rank. Our original piece described LeveL as the third-largest ATS, which is by share volume. Over this slightly longer window LeveL is third by shares and fourth by notional, because Sigma X2 edges it on dollars. Both statements are correct and the measure is stated wherever the rank appears.
Overnight scope. Only BOATS, Bruce and Moon are counted as overnight-dedicated. IBKR Eos operates in overnight hours, but FINRA reports its notional without a session breakdown, so attributing its volume to the overnight session would overstate that session by roughly a factor of five.
