Today, 580M (56%) were diverted to dark pool/naked shorts. If you understand the dynamics of these people, you should know why scaling out is KEY.
Per AI
Dark pools are private trading platforms where institutional investors can buy and sell large quantities of securities outside of public stock exchanges. They are designed to allow trades to be executed without immediately revealing the transaction details to the broader market, thereby minimizing price impact and maintaining anonymity.
Key Features of Dark Pools
1. Privacy:
• Dark pools conceal the size and price of orders until the trade is executed, reducing the likelihood of market-moving reactions.
2. Large Block Trades:
• They are primarily used for executing large block trades, often by institutional investors like hedge funds, pension funds, and mutual funds.
3. Off-Exchange Trading:
• Transactions occur away from traditional stock exchanges like the NYSE or NASDAQ, making them Alternative Trading Systems (ATSs).
4. Price Discovery:
• Trades typically occur at the midpoint of the bid-ask spread of the public market to ensure fair pricing.
Advantages of Dark Pools
1. Reduced Market Impact:
• Large trades are less likely to influence the stock’s price in the open market.
2. Anonymity:
• Buyers and sellers remain anonymous, protecting trading strategies.
3. Cost Efficiency:
• Lower transaction costs due to reduced market impact and narrower spreads.
Disadvantages of Dark Pools
1. Transparency Concerns:
• Limited visibility can reduce overall market transparency, potentially disadvantaging smaller investors.
2. Potential for Manipulation:
• Critics argue that the lack of public oversight may lead to unfair practices or conflicts of interest.
3. Regulatory Scrutiny:
• Regulators monitor dark pools closely to ensure compliance with fair trading practices.
How Dark Pools Differ from Public Markets
• Public Markets (e.g., NYSE, NASDAQ):
• Trades are visible to all participants, with real-time updates on price, volume, and bid/ask spreads.
• Dark Pools:
• Transactions are hidden from public view until after execution, offering greater privacy but less transparency.
Impact on Retail Investors
Dark pools primarily serve institutional traders, but their activity indirectly affects retail investors. For example:
• Price Impact: A large trade executed in a dark pool can influence public market prices once details are disclosed.
• Market Liquidity: They can improve or reduce liquidity depending on the stock and timing.
Examples of Dark Pool Operators
• Goldman Sachs’ Sigma X
• JP Morgan’s JPB-X
• Credit Suisse’s Crossfinder
Dark pools are a critical component of modern financial markets, facilitating efficient trading for institutional investors while raising debates about market fairness and transparency.
Key Features of Dark Pools
1. Privacy:
• Dark pools conceal the size and price of orders until the trade is executed, reducing the likelihood of market-moving reactions.
2. Large Block Trades:
• They are primarily used for executing large block trades, often by institutional investors like hedge funds, pension funds, and mutual funds.
3. Off-Exchange Trading:
• Transactions occur away from traditional stock exchanges like the NYSE or NASDAQ, making them Alternative Trading Systems (ATSs).
4. Price Discovery:
• Trades typically occur at the midpoint of the bid-ask spread of the public market to ensure fair pricing.
Advantages of Dark Pools
1. Reduced Market Impact:
• Large trades are less likely to influence the stock’s price in the open market.
2. Anonymity:
• Buyers and sellers remain anonymous, protecting trading strategies.
3. Cost Efficiency:
• Lower transaction costs due to reduced market impact and narrower spreads.
Disadvantages of Dark Pools
1. Transparency Concerns:
• Limited visibility can reduce overall market transparency, potentially disadvantaging smaller investors.
2. Potential for Manipulation:
• Critics argue that the lack of public oversight may lead to unfair practices or conflicts of interest.
3. Regulatory Scrutiny:
• Regulators monitor dark pools closely to ensure compliance with fair trading practices.
How Dark Pools Differ from Public Markets
• Public Markets (e.g., NYSE, NASDAQ):
• Trades are visible to all participants, with real-time updates on price, volume, and bid/ask spreads.
• Dark Pools:
• Transactions are hidden from public view until after execution, offering greater privacy but less transparency.
Impact on Retail Investors
Dark pools primarily serve institutional traders, but their activity indirectly affects retail investors. For example:
• Price Impact: A large trade executed in a dark pool can influence public market prices once details are disclosed.
• Market Liquidity: They can improve or reduce liquidity depending on the stock and timing.
Examples of Dark Pool Operators
• Goldman Sachs’ Sigma X
• JP Morgan’s JPB-X
• Credit Suisse’s Crossfinder
Dark pools are a critical component of modern financial markets, facilitating efficient trading for institutional investors while raising debates about market fairness and transparency.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Lnova : But the price target was like $90 or something lol
Lnova :
one more learning experience to take profit before the price changes for the worse
HopInsp : what is that mean?
HopInsp : is that mean we out of luck?
Wave_Rider : no, I don't understand. Can you explain it a bit please
Jaguar8 OP Lnova : That is unrealistic
L Boogie : sheeeeeshhhhh!! I'm learnN alot. Thanks for shareN as you go.
Jaguar8 OP Wave_Rider : There are shares available for the public to borrow, which is shown on Finnel. However, there are also shares that are being traded out of public exchange of which hedge funds and market makers. So half of the shares traded today were diverted to them. Supposedly it should not impact price, but what’s happening now is that it’s not allowing Stock to really go up as it should. Dark pool plus public shorts, screw retail traders.
Lnova Jaguar8 OP :
Lnova Jaguar8 OP : ty for explaining
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