BATS Global Markets Inc. and Direct Edge Holdings LLC had been in on and off talks regarding a merger deal. This had been going in for more than three years. BATS Chief Executive Joe Ratterman and Direct Edges' Bill O'Brien held a meeting in April over lunch in a restaurant in Tribeca neighborhood in New York.

Both exchange operators were backed by big banks. Originally, the exchange operators were created to overthrow the dominance of NYSE Euronect and NASDAQ OMX Group Inc

Profit margins had been under more pressure as the market became unstable and had hit volumes. The three-yearlong decline in stock trading also compromised the profit margins of different firms.

The immediate solution was through a combination of BATS and Direct Edge. This would reduce costs and use the expanded platform to make new streams of revenue. Last Monday, the two firms announced merger. Once completed, the deal would make the new exchange operator the second biggest in the US Stock Exchange.