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Wall Street’s ‘Private Rooms’

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Re: Wall Street’s ‘Private Rooms’

#11

Post by rkagerer »

dheera wrote: post #5

I've been wading through terabytes of financial data over the past month. (I'm an ML/AI software engineer trying to create a trading bot that makes me more consistent income during times of uncertainty that are outside my control.) This is some of the data I'm looking at. NVDA price on a particular day vs. average position of trades in bid ask spread aggregated over 10 seconds, on all the exchanges it is being traded…

If that's the case, couldn't the providers who operate the dark rooms (like OpenChronos) use their own realtime data to do so? Are there any who do that today? (i.e. monetized market surveillance). If so, does it run afoul of regulations?

Re: Wall Street’s ‘Private Rooms’

#13

Post by radlad »

Nifty3929 wrote: post #10

It is not clear to me what nefarious things people believe are going on there that we should be worried about. All the article says is that people are doing things we don't know about, but implies that somehow we should feel not-okay about this. I don't know what's going on in my neighbor's house either, and it could certainly be bad stuff, but that's doesn't mean that it is bad or that I should start spying on them.

Isn't the problem that this allows for all kinds of forms of insider trading?

> Insider trading—the practice of buying or selling a company's securities based on material, nonpublic information—has long been a contentious issue in financial markets.

https://www.investopedia.com/terms/i/insidertrading.asp

There's also a question of whether they are good for the health of the overall market: https://www.cbsnews.com/news/finances-dark-pools-explained/

Re: Wall Street’s ‘Private Rooms’

#14

Post by dheera »

rkagerer wrote: post #11
dheera wrote: post #5

I've been wading through terabytes of financial data over the past month. (I'm an ML/AI software engineer trying to create a trading bot that makes me more consistent income during times of uncertainty that are outside my control.) This is some of the data I'm looking at. NVDA price on a particular day vs. average position of trades in bid ask spread aggregated over 10 seconds, on all the exchanges it is being traded…

If that's the case, couldn't the providers who operate the dark rooms (like OpenChronos) use their own realtime data to do so? Are there any who do that today? (i.e. monetized market surveillance). If so, does it run afoul of regulations?

I don't know, honestly. I would imagine it to be illegal to trade on that data before it's released to publicly-available trade streams.

I'm of the opinion that a huge amount of manipulation happens and the SEC either turns a blind eye to it or the SEC goes after easier fish that have worse lawyers to get their income.

Re: Wall Street’s ‘Private Rooms’

#15

Post by potato3732842 »

jimbob45 wrote: post #3

Carlos Cabana, head of equity sales and trading at CastleOak, dubs the room a “diversity pool,” because the participants are all minority-operated brokerage firms. While in this instance CastleOak doesn’t know specifically who is on the other side of every trade, it knows it will be one of about 10 counterparties who meet certain eligibility criteria related to ownership and investment goals. I am convinced that they…

It's far more likely that it's a tongue in cheek inside joke than it is they care what outsiders think. Or it's an internal reference that's a dig at someone or something and was never meant to be made public (these firms are small enough this kind of stuff can happen). Non-consumer facing finance is just about the least diversity conscious industry ever. They only care about green.

Source: work in industry.

Re: Wall Street’s ‘Private Rooms’

#16

Post by dheera »

whatevermom wrote: post #7
dheera wrote: post #5

I've been wading through terabytes of financial data over the past month. (I'm an ML/AI software engineer trying to create a trading bot that makes me more consistent income during times of uncertainty that are outside my control.) This is some of the data I'm looking at. NVDA price on a particular day vs. average position of trades in bid ask spread aggregated over 10 seconds, on all the exchanges it is being traded…

There might be other ways to know about the data in advance? Some kind of flaw somewhere that lets us sniff the “dark rooms”?

I tried to train a model to predict the darkpool transactions from the rest of the transactions. It didn't work. I'm back to the drawing board trying other things now.

Re: Wall Street’s ‘Private Rooms’

#17

Post by crazygringo »

Nifty3929 wrote: post #10

It is not clear to me what nefarious things people believe are going on there that we should be worried about. All the article says is that people are doing things we don't know about, but implies that somehow we should feel not-okay about this. I don't know what's going on in my neighbor's house either, and it could certainly be bad stuff, but that's doesn't mean that it is bad or that I should start spying on them.

Insider trading.

Also potentially tax evasion?

Re: Wall Street’s ‘Private Rooms’

#18

Post by ajross »

radlad wrote: post #13
Nifty3929 wrote: post #10

It is not clear to me what nefarious things people believe are going on there that we should be worried about. All the article says is that people are doing things we don't know about, but implies that somehow we should feel not-okay about this. I don't know what's going on in my neighbor's house either, and it could certainly be bad stuff, but that's doesn't mean that it is bad or that I should start spying on them.

Isn't the problem that this allows for all kinds of forms of insider trading? > Insider trading—the practice of buying or selling a company's securities based on material, nonpublic information—has long been a contentious issue in financial markets. https://www.investopedia.com/terms/i/insidertrading.asp There's also a question of whether they are good for the health of the overall market: https://www.cbsnews.com/new…

It's by definition insider trading. If they made the trades in public the market price would change to reflect the demand. They don't want that to happen, they want the trade to happen at a non-market price set by people with information about the deal.

Re: Wall Street’s ‘Private Rooms’

#19

Post by reverendsteveii »

qweiop wrote: post #6

I remember reading about dark pools and asking a friend in finance if the sector really is as corrupt as it sounds, his reply? "Oh much more"

The only reaction more adverse than the one you get asking coders about remote voting is the one you get asking finance people about transparency and anticorruption. It's an open secret at this point that any effort that would weed out a significant proportion of the fraud would cripple our finance sector overall just because everyone who runs it would be in prison.

Re: Wall Street’s ‘Private Rooms’

#20

Post by ajsnigrutin »

Ban high frequency trading, ban instant transactions (put them on hold for some time before buying/selling (hours minmum, longer for larger quantities), make the held transactions public, and tax the profits on a time-owned scale.

This would turn "investments" into investments again... you really believe that company XY will do something good? Buy stocks and keep them for few years until they grow. Politican John Bobson dumps his stock of ZX company? Well, now we know before they actually get dumped, and can sell our stocks too.

Buying stocks of a company for 1.7 seconds and selling them back is not an 'investment' by any kind of proper definition.

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