Ratigan nails how "dark pools" rip off traders: Dark pool trading = 10% of volume

Quote from talontrading:


Taibbi is obviously an idiot... If you're worried about all the HFT traders (his last brilliant article), why would you not want to be able to hide your order flow in the dark pools which HFT algos can't access? Please be consistent if you're going to complain about things people! lol
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Investment banks who operate HFT trading don't want to probe the market with a large order because their HFT fucks it up.

So, they rely on "dark pools" to circumvent their HFT, to move size without stepping on an algo-trap laid to ensnare smaller investors.

Is that what you're defending?

Besides being totally opaque and non-transparent, Investment Banks are the only players with the resources to engage in HFT AND Dark Pools.

Retailers can't. Investors can't. Even medium-sized operations can't.

That gives Investment Banks a HUGE EDGE when it comes to speculating. Front run the weak(er) hands with HFT, then sidestep their front running with Dark Pools. Not only is that completely hypocritical (good when they do it to us - bad when we do it to them), but it's Win-Win for them (IB's). Lose-lose for us (retailers).

Investment Banks slanted the tables in their favor (once again). And you openly support it. What of fair markets, and transparency?

The CNBC dude is right on every point except the "Mom and Pop" class-warfare junk. Its heartening to see ET'ers and media big wigs finally call a spade, a spade.

Bankers Run Washington. You hear what that lady said in the video? They're crawling all over it -- WITH OUR TAX DOLLARS!! Just like Durbin said. Just like the other Democrap said. Bankers own Congress. Its Mussolini Fascism and they couldn't give a damn if they kill the Golden Goose. Credit default swaps being the smoking gun next to listless corpse. Anyone care to explain what uninsurable interest, is? No, that's not important...
 
Quote from occam:

You make some good points. Another issue is, who "owns" the information about the fact that a large mutual fund wants to sell 10 million shares of a given stock? By putting the order in a visible market, they would be "giving" this info away for free. Why should a mutual fund give the trading community free info that can be used against the fund?
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They don't have to "give" anything away.

Big Funds can use market orders. Same as everyone else.

Or, they can use limit orders. And have their orders show on the book. Just like everyone else.
 
Quote from achilles28:

They don't have to "give" anything away.

Big Funds can use market orders. Same as everyone else.

Or, they can use limit orders. And have their orders show on the book. Just like everyone else.
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The issue at hand is "size"....

Let's make it simple....

Let's say there is a block of 100 houses....
Each house is owned by separate individuals who are diversified in their opinions....The last sale creates the price for all....

Let's say there is another block of 100 houses....40 of the houses
are owned by one person....60 of the other houses are owned by 60 diverse people....

Which market is actually a better market ? The person with the 40 houses has a liquidity problem....

The US has allowed the "out of balance" to fester such that the person causing the imbalance is also getting to make the rules....
This only makes the problem of a fair market that much worse....

This is what has happened to the securities markets.....
There needs to be size limitations per account....

Whatever the market does....its number one priority should be to create as many small accounts as possible...diverse in scope....even on an international basis....equal small costs...fact based wiki information....ie 4:1 margin ....ON or intra...no account minimum or maximum.....no taxation of any kind....
 
Quote from achilles28:

The CNBC dude is right on every point except the "Mom and Pop" class-warfare junk. Its heartening to see ET'ers and media big wigs finally call a spade, a spade.
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When I heard the "Mom and Pop" line it reminded me of flytiger's ineffective methods of presenting his arguments.
 
Quote from truehawk:

Of course the reality is that the two-tiered system creates one pool of fools whose every movement is visible to every animal on the Serengeti, and another pool of giant bloodthirsty carnivores who get to walk around invisible, picking off the dik-diks one by one.
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That's really funny!

Maybe they should just say that dark pools are charity work and they make no money off of them. That way running dark pools can qualify you for tax deductions. :)
 
Quote from gaj:

you do know that individuals with direct access trading can do hidden orders...
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In addition any mope here with 100k can open a GSEC mini prime account and have acces to SIGMAX dark pool and participate.

Reg NMS applies to dark pools already.
 
Quote from indahook:

In addition any mope here with 100k can open a GSEC mini prime account and have acces to SIGMAX dark pool and participate.

Reg NMS applies to dark pools already.
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I only trade futures, so not sure what this means. Do you mind dropping few lines explaining.

Thanks,
redduke
 
I haven't watched the video but yes, shares actually can be created out of thin air via naked short swindling, much the same way money is created out of thin air. I suppose you could say the US economy is just one big collection of thin air.

Quote from makloda:

Enough is enough, is this guy an idiot? It appears they are trying to find a new smoking gun on Blankfein's desk every day now.

"Dumping on unsuspecting mom and pop investors"? Please, that is pathetic! It's not like the shares are created out of thin air. Shares have been bought and sold outside of exchanges since the beginning of time.

I don' t see how traders are ripped off. How is GS ripping me off when they buy 1 million stocks in AAPL from some pension fund over a dark pool and then sell a fraction to me? Where exactly does the rip off occur.
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