“It’s a club…and You’re not in it” ~ George Carlin
Dark Pool Investing
Dark pools are an ominous-sounding term for private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public. Also known as “dark pools of liquidity,” they are so named for their complete lack of transparency. Dark pools came about primarily to facilitate block trading by institutional investors, who did not wish to impact the markets with their large orders and consequently obtain adverse prices for their trades. While dark pools have been cast in a very unfavorable light in Michael Lewis’ bestseller “Flash Boys: A Wall Street Revolt,” the reality is that they do serve a purpose. However, their lack of transparency makes them vulnerable to potential conflicts of interest by their owners and predatory trading practices by some high-frequency traders. (See also “How IEX is Combating Predatory Types of High-Frequency Trades.”)
Why Congress Isn’t Liable for Insider Trading
The incredible stock-picking ability of SEC employees
and the companies they own that pay no taxes.
27 giant profitable companies paid no taxes
High Frequency Trading makes up over 80% of all trades. The markets move up and down by these computer alogarithms, not the individual investor, money manager or trader.