Dark Pool Block Trades Execution

[Deenius]

Could anyone explain how dark pool block trades are executed?

I generally understand how dark pools work. However, sometimes I wonder how it is possible that a large block of shares (for example, 1,000,000 shares) can be executed at once? How can a buyer or a seller know that such dark pool liquidity may exist?

Thank you.

 

[wrbtrader]

Institutional A calls Institution B:

(Institution A)...My Beyonce foundation wants to buy 1,000,000 shares. Is your Adele foundation still planning to sell 1,000,000 shares to fund her trip to the moon in that space adventure being sold to celebrities ?

(Institution B) - Yeah, the foundation still wants to sell. Lets make this happen at 2pm est but only if the price is no higher than $6.53 and it will print tomorrow after today's transaction.

Better explanation at https://www.investopedia.com/articles/markets/050614/introduction-dark-pools.asp

There are some software makers out there that market their software to retailers...the software makers say they show block trades in real-time. The question...is it real-time for block trades that happen a day ago or real-time as in the block trade transactions is happening right now.

I believe its old info by those software programs being marketed to retail traders considering real-time info as in its happening right now is only available to institutions, brokers and such that have real-time access...not retail traders.

Yet, these software being marketed to retail aren't going to show it was Beyonce foundation that bought and Adele foundation that sold.

wrbtrader

 

[ajacobson]

Want to see a great explanation go visit Luminex's sight.

 

[Real Money]

Maybe a little off-topic but related to the unlit exchanges.

I don't know much about this site but it was recommended on here before.

Apparently, they have some kind of Dark Pool index going. Looks like it's leading the S&P 500 from the look of their landing page. I'm interested, but I already have something that does the same thing.

https://squeezemetrics.com/monitor​

I wonder if any of you guys know anything about this...

 

[schizo]

(Institution A)...My Beyonce foundation wants to buy 1,000,000 shares. Is your Adele foundation still planning to sell 1,000,000 shares to fund her trip to the moon in that space adventure being sold to celebrities ?

(Institution B) - Yeah, the foundation still wants to sell. Lets make this happen at 2pm est but only if the price is no higher than $6.53 and it will print tomorrow after today's transaction.

THIS IS A BIG NO NO. Pre-arranged trading (expressed or implied) of stocks, futures, and options among market makers is ILLEGAL.

Prearranged Trading Law and Legal Definition
Prearranged trading is a trading between brokers in accordance with an expressed or implied agreement or understanding that gives the appearance of trading for purposes of inducing others to trade. [In re Enron Corp. Secs., 235 F. Supp. 2d 549 (S.D. Tex. 2002)]. Prearranged trading is a violation of the Commodity Exchange Act and CFTC regulations.

Any purchase or sale transaction or series of transactions coupled with an agreement, arrangement or understanding directly or indirectly to reverse such transaction or series of transactions or limit the risk of either party to the transaction which would violate the securities acts or rules of self regulatory organizations is commonly known as prearranged trading. [United States v. Milken, 759 F. Supp. 109, 128 (S.D.N.Y. 1990)].

 

[wrbtrader]

Of course its illegal. Yet, that does not imply it doesn't happen or has never happen (see Enron).

wrbtrader

 

[guru]

Could anyone explain how dark pool block trades are executed?

I generally understand how dark pools work. However, sometimes I wonder how it is possible that a large block of shares (for example, 1,000,000 shares) can be executed at once? How can a buyer or a seller know that such dark pool liquidity may exist?

Thank you.

See: https://www.elitetrader.com/et/threads/flash-friday-turning-the-spotlight-on-dark-pools.339251/
"he was stunned at the ATS numbers released by FINRA, especially the average trade size of 187 shares."

 

[Amun Ra]

Could anyone explain how dark pool block trades are executed?

I generally understand how dark pools work. However, sometimes I wonder how it is possible that a large block of shares (for example, 1,000,000 shares) can be executed at once? How can a buyer or a seller know that such dark pool liquidity may exist?

Thank you.

This video might help. IIRC this woman goes into a bit of detail about dark pools.