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It's manipulation by definition. These hidden trades exist to prevent other people from being able to act in their own best interest based on available informat

It's manipulation by definition. These hidden trades exist to prevent other people from being able to act in their own best interest based on available information. This isn't about what's going on in your neighbor's house. Your neighbor's house is private, markets are public. This is about being at a public auction in the middle of bidding on something when someone else walks up to the crier, whispers a few words in his ear, and then the crier just quietly says "bidding is closed" and you have no idea who bought the item or for what price but now you have to try to price similar items.

oangemangut 2y ago
In the case of Dark Pools, it would actually be the crier saying "a lot 10x the size of what I'm auctioning just traded somewhere else where none of you lot can trade for xx price". So after they say that you actually do know the price that they bought the item(s). This is since the dark pools have requirements to report to the trade tapes their trades in fairly similar latency to the exchanges themselves. EDIT: The rules also dictate the allowed prices the dark pools trade at. They have to be within the national BBO, they can't just trade at whatever price they want. So the public auction is actually helping them find the prices, without their pre-trade information affecting the price before execution.
gruez 2y ago
>It's manipulation by definition. These hidden trades exist to prevent other people from being able to act in their own best interest based on available information. So if I have a RTX 4090 to sell (a very sought after commodity these days), and I sell it to my buddy rather than listing it on ebay, I'm doing market "manipulation"?
- wesapien 2y ago
  Depends on the volume
  - gruez 2y ago
    Fine, is OpenAI doing "manipulation" when they buy 10k H100s from nvidia directly, rather than on the open market?
    - hn_acc1 2y ago
      If it causes "no liquidity" in the open market because nvidia (tsmc) can only produce so many GPUs / month and that causes nvidia's other cards to have a street price of 2x MSRP due to lack of availability? I would say yes.. It's just that "H100" or "RTX 5090" is not a registered stock with the SEC, so there aren't specific laws / penalties for manipulating the GPU market. Same as "10 per store" limits when PS5s or whatever are in short supply, but then the CEO calls up the warehouse to get one for every student in their kid's class.
- fedeb95 2y ago
  your graphic card isn't a stock market.
  - gruez 2y ago
    A market is a market, is it not?
    - deleted 2y ago
      [deleted]
    - reverendsteveii 2y ago
      no, securities aren't the same as retail products
      - gruez 2y ago
        That might be so, but the original comment wasn't talking about "securities manipulation", just "manipulation".
        reverendsteveii 2y ago
        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
      - roenxi 2y ago
        Most things are different from each other. Why does that difference matter in this case? It looks a lot like traders trading in a market. That isn't manipulation.
        chipsrafferty 2y ago
        A graphics card is non-fungible due to depreciation from use.
        2y ago
charcircuit 2y ago
Your analogy is bad because this doesn't happen at a public place. People can't privately sell goods between each other. If someone someone sells their gold to a gold buying shop, that was not a public auction, yet people are still able to price gold.
infecto 2y ago
Not manipulation as most/all of these execute around the NBBO. Exceptions exist for extreme block trades that may give some price advantage do to the sheer scale but we are not talking about manipulation. I can easily see the retail price of a good, I can go to a wholesaler or some other holder of this good and ask them if I can buy it at a cheaper price. They might tell me to kick rocks if I don't have volume. Pretty similar to a dark pool. Markets are both private and public everywhere.

oangemangut 2y ago

In the case of Dark Pools, it would actually be the crier saying "a lot 10x the size of what I'm auctioning just traded somewhere else where none of you lot can trade for xx price". So after they say that you actually do know the price that they bought the item(s). This is since the dark pools have requirements to report to the trade tapes their trades in fairly similar latency to the exchanges themselves. EDIT: The rules also dictate the allowed prices the dark pools trade at. They have to be within the national BBO, they can't just trade at whatever price they want. So the public auction is actually helping them find the prices, without their pre-trade information affecting the price before execution.

gruez 2y ago

>It's manipulation by definition. These hidden trades exist to prevent other people from being able to act in their own best interest based on available information. So if I have a RTX 4090 to sell (a very sought after commodity these days), and I sell it to my buddy rather than listing it on ebay, I'm doing market "manipulation"?

wesapien 2y ago
Depends on the volume
- gruez 2y ago
  Fine, is OpenAI doing "manipulation" when they buy 10k H100s from nvidia directly, rather than on the open market?
  - hn_acc1 2y ago
    If it causes "no liquidity" in the open market because nvidia (tsmc) can only produce so many GPUs / month and that causes nvidia's other cards to have a street price of 2x MSRP due to lack of availability? I would say yes.. It's just that "H100" or "RTX 5090" is not a registered stock with the SEC, so there aren't specific laws / penalties for manipulating the GPU market. Same as "10 per store" limits when PS5s or whatever are in short supply, but then the CEO calls up the warehouse to get one for every student in their kid's class.
fedeb95 2y ago
your graphic card isn't a stock market.
- gruez 2y ago
  A market is a market, is it not?
  - deleted 2y ago
    [deleted]
  - reverendsteveii 2y ago
    no, securities aren't the same as retail products
    - gruez 2y ago
      That might be so, but the original comment wasn't talking about "securities manipulation", just "manipulation".
      - reverendsteveii 2y ago
        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
    - roenxi 2y ago
      Most things are different from each other. Why does that difference matter in this case? It looks a lot like traders trading in a market. That isn't manipulation.
      - chipsrafferty 2y ago
        A graphics card is non-fungible due to depreciation from use.
        2y ago

charcircuit 2y ago

Your analogy is bad because this doesn't happen at a public place. People can't privately sell goods between each other. If someone someone sells their gold to a gold buying shop, that was not a public auction, yet people are still able to price gold.

infecto 2y ago

Not manipulation as most/all of these execute around the NBBO. Exceptions exist for extreme block trades that may give some price advantage do to the sheer scale but we are not talking about manipulation. I can easily see the retail price of a good, I can go to a wholesaler or some other holder of this good and ask them if I can buy it at a cheaper price. They might tell me to kick rocks if I don't have volume. Pretty similar to a dark pool. Markets are both private and public everywhere.