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Wall Street’s ‘Private Rooms’

bloomberg.com

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Re: Wall Street’s ‘Private Rooms’

#71

Post by rtkwe »

gruez wrote: post #56
oangemangut wrote: post #24

Earlier quoted context omitted.

If you look up RegNMS the goal is to make public markets fair by having rules that have to be met in order to trade. Dark pools allow participants to 'hide' information that's not public. It is mostly about the order books. If dark pool sell order for 1B of TSLA stock goes on the order book, only other members of the pool get that information. The dark pools are required to still follow RegNMS rules for trade prices,…

>Dark pools allow participants to 'hide' information that's not public. It is mostly about the order books. If dark pool sell order for 1B of TSLA stock goes on the order book, only other members of the pool get that information. The dark pools are required to still follow RegNMS rules for trade prices, but there is an inherent asymmetry in the market information in this case as the dark pool participants can see the…

But by breaking up the order they have to wait and the market can move in reaction to their sell off unless they do it very slowly. Dark pools can completely hide a large sell or buy order from the market long enough to execute at the current strike if there's another member in the pool buying. They wouldn't use it if it didn't give them an advantage because it costs more than regular trades.

Re: Wall Street’s ‘Private Rooms’

#73

Post by ElliotM »

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…

> Unfortunately the SEC only requires them to report transactions within 15 minutes, not in real time.

TRF reports must happen within 10 seconds or be submitted with a late modifier [0]. An executing broker systematically submitting all reports 15 minutes late would be investigated pretty quickly.

You can buy access to the consolidated tape from a marketdata provider, although this is going to be pretty prohibitively expensive for an individual.

[0] https://www.finra.org/rules-guidance/rulebooks/finra-rules/6...

Re: Wall Street’s ‘Private Rooms’

#75

Post by QuantumGood »

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,…

And then they found that some of the liquidity in dark pools was by dark HFT.

Re: Wall Street’s ‘Private Rooms’

#76

Post by gruez »

rtkwe wrote: post #71
gruez wrote: post #56

Earlier quoted context omitted.

>Dark pools allow participants to 'hide' information that's not public. It is mostly about the order books. If dark pool sell order for 1B of TSLA stock goes on the order book, only other members of the pool get that information. The dark pools are required to still follow RegNMS rules for trade prices, but there is an inherent asymmetry in the market information in this case as the dark pool participants can see the…

But by breaking up the order they have to wait and the market can move in reaction to their sell off unless they do it very slowly. Dark pools can completely hide a large sell or buy order from the market long enough to execute at the current strike if there's another member in the pool buying. They wouldn't use it if it didn't give them an advantage because it costs more than regular trades.

>But by breaking up the order they have to wait and the market can move in reaction to their sell off unless they do it very slowly

it kinda works out because the other side is also smart and will also break up their orders. Putting in a massive buy order is a good way to pay through the nose.

Re: Wall Street’s ‘Private Rooms’

#77

Post by throwaway199010 »

reverendsteveii wrote: post #19
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.

[dead]

Re: Wall Street’s ‘Private Rooms’

#78

Post by reverendsteveii »

gruez wrote: post #74
reverendsteveii wrote: post #72

Earlier quoted context omitted.

no, securities aren't the same as retail products

That might be so, but the original comment wasn't talking about "securities manipulation", just "manipulation".

only if you take it entirely out of the context in which it's in, which is the comment section on an article about securities

Re: Wall Street’s ‘Private Rooms’

#79

Post by tedunangst »

JKCalhoun wrote: post #69
tedunangst wrote: post #40

Earlier quoted context omitted.

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.

You may be thinking of front running, which is an agency problem, and also not this.
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