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Wall Street’s ‘Private Rooms’

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Re: Wall Street’s ‘Private Rooms’

#61

Post by gaadd33 »

LatteLazy wrote: post #22
Nifty3929 wrote: post #8

Earlier quoted context omitted.

Did he elaborate on this?

Goldman and others got in trouble for selling access to the supposedly secret orders in their dark pools back in the day. They were fined 800k I think? I believe dark pools started growing post flashboys when people realising what hft meant and wanted an escape (see comment below). But as they got big they became a target in and of themselves (ecology in action I guess). I worked in algo trading at the time (not hft,…

Dark pools started in the 1980s once the SEC permitted securities to be traded off the exchange they are listed on. I think that was well before flashboys.

Re: Wall Street’s ‘Private Rooms’

#62

Post by LatteLazy »

gaadd33 wrote: post #61
LatteLazy wrote: post #22

Earlier quoted context omitted.

Goldman and others got in trouble for selling access to the supposedly secret orders in their dark pools back in the day. They were fined 800k I think? I believe dark pools started growing post flashboys when people realising what hft meant and wanted an escape (see comment below). But as they got big they became a target in and of themselves (ecology in action I guess). I worked in algo trading at the time (not hft,…

Dark pools started in the 1980s once the SEC permitted securities to be traded off the exchange they are listed on. I think that was well before flashboys.

I had no idea they went that far back? Good knowledge!

Re: Wall Street’s ‘Private Rooms’

#63

Post by hobermallow »

computator wrote: post #52

Do all trades get reported to some agency of the government (including those done in private rooms)? Do companies themselves know who owns their shares (including those done in private rooms)? If the answer is no to either or both of the above, doesn't that create all sorts of ownership problems? As an analogy, I'm imagining a country where there is no reliable municipal property registry, and no one knows who owns a…

Yes there is a record for most trades done. The regulating body depends on the type of instrument (equities, options, futures, fixed income, etc.)

The Consolidated Audit Trail (CAT) is the primary location for this data as it relates to equities. https://www.finra.org/rules-guidance/key-topics/consolidated...

The settlement cycle also dictates the frequency of reporting for many investment instruments. https://www.finra.org/investors/insights/understanding-settl...

Re: Wall Street’s ‘Private Rooms’

#64

Post by dmurray »

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…

That's one of the purposes of darkpools, to let institutions trade large size without moving the market. No one's getting manipulated here: both the buyers and sellers know what's going on.

You can trade on these yourself - the darkpool operators are always looking for new market makers. All you need to do is agree to quote a few hundred US equities in decent size inside the NBBO, six and a half hours a day, and you too can have access to this flow.

Re: Wall Street’s ‘Private Rooms’

#66

Post by [deleted] »

gruez wrote: post #34
ajross wrote: post #18

Earlier quoted context omitted.

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.

The "insider" in "insider trading" refers to trading on privileged nonpublic information, not arranging the trades in a private venue.

[deleted]

Re: Wall Street’s ‘Private Rooms’

#68

Post by [deleted] »

ikmckenz wrote: post #25
ajross wrote: post #18

Earlier quoted context omitted.

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.

No, "I am XYZ hedge fund and I want to buy stock ABC" is not material non-public information to XYZ hedge fund. If it was, any buying or selling of stocks would always be illegal, since you would be "insider trading" on your desire to buy the stock.

[deleted]

Re: Wall Street’s ‘Private Rooms’

#69

Post by JKCalhoun »

tedunangst wrote: post #40
JKCalhoun wrote: post #33

Earlier quoted context omitted.

Really? Isn't knowing that an extremely large trade is about to take place insider information?

That is only insider information for the person making the trade.

And there are no other parties involved before the trade? That was not my understanding.
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