RE: Friday sailing26 Mar 2021 10:52
Shezer, thanks for the link.
So, if I read this correctly, dark pool trades are trades that bypass the exchange and are also not registered.
Therefore, we don't know the actual market movements.
Thus, if a large buyer wants to build a stake, they go to one of the dark pols and buy there, from someone willing to sell. That could be a market maker for example who would have to get it off the normal exchange. Correct? Or from another seller on the dark pool but we wouldn't see that as its not on the exchange in open.
In the former we would see it as sells outweighing buys on our exchange. In the latter we wouldn't see anything of it. Still correct?
Now, as a buyer is building a stake, at some stage, when they are finished, they have to declare in the open what they have if they are above 3%. Still correct?
And this is what you and others are referring to, big buyers building stake in the background which we don't see until 'it's too late ' and the SP explodes.
The same goes the other way around then if a large holder wants to sell without disturbing the market before they are done. In this case we would either see the buys outweigh sells on the normal exchange in the example above, or nothing as it's all in the dark pool until it's too late and the large seller informs the market when done. In the latter case though there could still be another large buyer within the dark pool that we as PI won't see.
Complicated stuff I have to say...
MS