By
www.ProfitableTradingTips.com
Beware of Dark Pools
Dark Pools: Beware of What You Cannot See!
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
The current debate about high
frequency traders conti...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
The State of New York alleges that
Barclays falsified...
Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss t...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
The bottom line here is that regular
traders and inve...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
. No matter how good their technical
analysis was the...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Traders and investors need to beware
of dark pools wh...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Dark Pools
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
A dark pool is a trading network which
allows traders...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
An issue for someone who owns huge
amounts of stock i...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
These folks like dark pools because no
one else sees ...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Imagine that you are looking for a
house and want to ...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
You are told that everything to the
North, West and S...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
You have no idea what prices are being
paid for homes...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Dark pools fly in the face of the concept
of efficien...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
In our article about low volume trading
we talked abo...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Running Fast and
Being Left Behind
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Not knowing what is going on in the
trading room next...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
The other reason to beware of dark
pools is that thos...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
This is in addition to the complaints
about high spee...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
No matter how hard a regular trader
studies, evaluate...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
For a long term investor who accurately
predicts that...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
But for the trader who wants to scalp
profits from a ...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
Also remember that a trader working in
a dark pool ca...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
This he can place trades on the
NASDAQ or NYSE that w...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
This can be a very profitable form or
arbitrage if a ...
http://profitabletradingtips.com/stock-
trading/beware-of-dark-pools
In trading volatile stocks this can be
especially pro...
Upcoming SlideShare
Loading in …5
×

Beware of Dark Pools

424 views

Published on

http://profitabletradingtips.com/stock-trading/beware-of-dark-pools

Beware of Dark Pools

The current debate about high frequency traders continues. Barclays, the United Kingdom based bank group is being taken to court by the New York state Attorney General. The State of New York alleges that Barclays falsified data about high frequency trader concentrations, used private customer information improperly and routed virtually every trading order through its dark pool first. The bottom line here is that regular traders and investors were pushed to the back of the line. No matter how good their technical analysis was they had to work harder for profits and to avoid losses because their orders who queued up behind high frequency traders. Traders and investors need to beware of dark pools where trades are hidden from the outside world and transparency does not exist.

Dark Pools

A dark pool is a trading network which allows traders to buy or sell large orders without transparency. An issue for someone who owns huge amounts of stock is that when they want to sell their sell orders are typically large enough that they drive the market price down. These folks like dark pools because no one else sees their order. However, this fragments the market. Imagine that you are looking for a house and want to know what prices have been selling for in your area. You are told that everything to the North, West and South of you is a dark pool of real estate. You have no idea what prices are being paid for homes and may end up paying way too much or selling your house for way too little. Dark pools fly in the face of the concept of efficient pricing and the efficient market hypothesis of the stock exchange. In our article about low volume trading we talked about the efficient market hypothesis and how this facilities fair pricing.

Running Fast and Being Left Behind

Not knowing what is going on in the trading room next door is one aspect of why you should beware of dark pools. The other reason to beware of dark pools is that those who run dark pools, like Barclays, have the bad habit of running all trades through the dark pool before regular traders see and have an opportunity act on them. This is in addition to the complaints about high speed and high frequency traders that they step in front of regular traders. No matter how hard a regular trader studies, evaluates the market and makes smart trades he or she is always second, or third or fourth in line.

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
424
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
6
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Beware of Dark Pools

  1. 1. By www.ProfitableTradingTips.com Beware of Dark Pools Dark Pools: Beware of What You Cannot See!
  2. 2. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools The current debate about high frequency traders continues. Barclays, the United Kingdom based bank group is being taken to court by the New York state Attorney General.
  3. 3. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools The State of New York alleges that Barclays falsified data about high frequency trader concentrations, used private customer information improperly and routed virtually every trading order through its dark pool first.
  4. 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com
  5. 5. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools The bottom line here is that regular traders and investors were pushed to the back of the line.
  6. 6. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools . No matter how good their technical analysis was they had to work harder for profits and to avoid losses because their orders who queued up behind high frequency traders.
  7. 7. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Traders and investors need to beware of dark pools where trades are hidden from the outside world and transparency does not exist.
  8. 8. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Dark Pools
  9. 9. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools A dark pool is a trading network which allows traders to buy or sell large orders without transparency.
  10. 10. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools An issue for someone who owns huge amounts of stock is that when they want to sell their sell orders are typically large enough that they drive the market price down.
  11. 11. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools These folks like dark pools because no one else sees their order. However, this fragments the market.
  12. 12. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Imagine that you are looking for a house and want to know what prices have been selling for in your area.
  13. 13. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools You are told that everything to the North, West and South of you is a dark pool of real estate.
  14. 14. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools You have no idea what prices are being paid for homes and may end up paying way too much or selling your house for way too little.
  15. 15. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Dark pools fly in the face of the concept of efficient pricing and the efficient market hypothesis of the stock exchange.
  16. 16. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools In our article about low volume trading we talked about the efficient market hypothesis and how this facilities fair pricing.
  17. 17. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Running Fast and Being Left Behind
  18. 18. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Not knowing what is going on in the trading room next door is one aspect of why you should beware of dark pools.
  19. 19. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools The other reason to beware of dark pools is that those who run dark pools, like Barclays, have the bad habit of running all trades through the dark pool before regular traders see and have an opportunity act on them.
  20. 20. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools This is in addition to the complaints about high speed and high frequency traders that they step in front of regular traders.
  21. 21. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools No matter how hard a regular trader studies, evaluates the market and makes smart trades he or she is always second, or third or fourth in line
  22. 22. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools For a long term investor who accurately predicts that a stock will grow tenfold in a decade it may not be necessary to beware of dark pools.
  23. 23. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools But for the trader who wants to scalp profits from a volatile market the mere presence of dark pools may result in diminished profits or even losses.
  24. 24. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools Also remember that a trader working in a dark pool can also see the regular markets.
  25. 25. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools This he can place trades on the NASDAQ or NYSE that will be profitable once his huge trade in the dark pool is completed and published.
  26. 26. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools This can be a very profitable form or arbitrage if a trader in a dark pool just sold a huge block of stock in the pool only to pick it up again in the regular market after the price plummets
  27. 27. http://profitabletradingtips.com/stock- trading/beware-of-dark-pools In trading volatile stocks this can be especially profitable.

×