CATS (Computer Assisted Trading System) is an automated exchange system developed for the Toronto Stock Exchange in 1977. CATS was one of the first technologies allowing for a full automation of the price-setting process in a stock exchange. This technology was implemented in several other stock exchanges in the 1980s. In some cases, it was used as an assistance to open-outcry, but in others it allowed for a full dismantlement of the open-outcry institution. The Paris Bourse purchased this system in the early 1980s and implemented it as CAC (Cotation Assistée en Continu).

CATS handled the process of order matching and price setting through a "double auction" algorithm. It is credited for having been the first system to allow for a full automation of the price setting process in a centralized, order-driven stock market.

[edit] References

• Domowitz, I. 1990 "The Mechanics of Automated Trade Execution Systems", Journal of Financial Intermediation 1(2): 167-194.
• Domowitz, I. and Wang, J. 1994 "Auctions as Algorithms: Computerized Trade Execution and Price Discovery", Journal of Economic Dynamics and Control 18(1): 29-60.