submitting orders to dark pool

[emg]

Quote from Traveler:

I'm asking the question from a microstructure perspective. I don't think the argument of "You're holding the stock for a $1 profit, so why do you care about a penny" make the gaming of orders ok.

It could be done with regulation, say by either delaying the direct feeds to match the SIP, or by specifying a minimum time for orders to be live. And also by binding broker dealers to a minimum tick size of .01

dark pool is rigged by prop firms (market makers). u don't have the "edge" to overide the rigged.


comprende. have some mojitos

 

[tripledtrader]

Quote from Traveler:

So how do we fight these guys? There seems to be no way to win. Market orders get gamed and pay the spread anyway. Resting displayed limit orders signal your intentions and give others a free option. Sweep the book IOC for whatever quantity you really want? You'd need a way to do it simultaneously across all destinations and an exemption from Reg NMS routing rules.

You are correct, both limit orders and market orders are now toxic, which eliminates scalping, and market making as viable strategies.

However, we can still be profitable, I wrote this article for CFA magazine last year, which outlines some necessary trading adjustments. These adjustments have helped to keep me profitable.

http://www.defendtrading.com/cfm.v21.n4.16.pdf

 

[londonkid]

thanks for the contributions, great insight.

the regulators should really get a handle on this.