Dark Pools are generally operated by banks, they are supposed to be a safe way for institutional investors to execute block trades without worrying that their transactions will move market prices.
Another way to make money out of money just for the sake of profit.
Off-exchange venues have mushroomed in the past several years along with high-frequency trading, a twin development that demands more scrutiny.
Today, more than a third of equity trading in the United States and Europe is done outside the public exchanges, and most major banks run dark pools, including Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS and Barclay’s.
Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense before the deal is completed.
Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.
Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.
High-frequency traders generated about $21 billion in profits last year. But with some 40 percent of stock trades now occurring off-exchange, there is mounting evidence that the shift is obscuring the true prices of stocks, raising the cost of trading and, by extension, damaging investor confidence.
In recent days it has being claimed banks covered up predatory high-speed trading in dark pool operations. Barclays being named as one enriching its pockets at the expense of investors. There is no reason to believe that this kind of wrong doing is limited to Barclay so financial regulators are to impose more transparency which is a complete Jock.
I can hear you saying what is got to do with me. A profit is a Profit whether is honest or not.
However the question must be asked, is there such a thing as an honest profit with the Internet becoming a critical platform for international trade in the 21st Century.
The cross-border flow of information is increasingly providing a vast range of economic opportunities that if realized will drive innovation, invention and productivity growth. At the same time as the significant economic potential of the Internet is beginning to be more fully realized, governments are increasingly intervening in the operation of the Internet in order to address challenges such as from cyber crime and ensuring data privacy.
Over 2.3 billion people have access to the Internet and this figure is expected to grow to five billion by 2020. The Internet has the potential to change how international trade is conducted.
The words ‘to make money’ hold the essence of human morality…Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers who claim your product by tears, or of the looters who take it from you by force. Money is made possible only by the money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow …
Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money.
What I consider to be evil about Dark Pools, algorithms, high-frequency trading is that they all generate profits for those that don’t need more profit.
They do so without contributing one iota to the problems facing all of us now and in the future.
This is why me must capture Greed at it source.
To place a 0.05% World Aid Commission on all such transactions over $20,000. It will cost us nothing but it can only be achieved by all of us demanding it. ( See previous Blogs)
There is no use sitting under your energy-saving light bulb with a shopping bag for life. If you want to do some think spread the word. I can guarantee you it will make you feel a lot better.