2 ms·
Dark pools are bad for the exchange operators of public exchanges (like NYSE and NASDAQ) but it's far from obvious that they are bad for the financial industry.
by niggler 14y ago
Dark pools are bad for the exchange operators of public exchanges (like NYSE and NASDAQ) but it's far from obvious that they are bad for the financial industry.
There are certain advantages: for example, even now, all it takes is $50-100K to whip the price of certain public companies like Alcoa (AA), a Dow 30 component. I have rocked the boat many times, and the fact that most small traders can do the same doesn't bode well for the markets. The dark pools do allow for large transactions without affecting the price too much, keeping some sense of order (as vacuous as that sounds).
It's important in these discussions to understand that the various companies take sides based on their desired outcome. Other effects like insider trading are far more disconcerting than the issues claimed in this case.
- beagle3 14y ago> The dark pools do allow for large transactions without affecting the price too much, keeping some sense of order (as vacuous as that sounds). Another way to read your statement: "The dark pools allow the inherently unstable and fragile market to appear more robust than it is". Which, I think, is a bad thing for society. Because a fragile market will break, sooner or later, and it's better if the fragility is visible so that players can actually evaluate their risks.