Computer Trading and Dark Pools

Bob the Super Hamste writes "CNN Money has an article on computerized trading; specifically, the non-public markets that are often used to execute orders. The company that the article discusses executes 1/8 of all stock trades in the U.S., or about 900 million trades a day. For comparison, the NYSE executes about 700 million trades. The article discusses 'dark pools,' or private markets where quotes aren't disclosed to the broader public markets. If the company is unable to fill an order from within its own dark pool, it will submit the order to the broader public market (13 public exchanges), as well as up to 20 other private dark pools. The quotes offered by the private dark pools, by law, have to be the same or a better quote than those offered on public exchanges. There have been recent questions about whether the quotes provided by dark pools have been the best for customers and there is a current investigation by FINRA into the methods used by market makers and dark pool operators to fill orders."

Comments

Re:If the question is:

[DarkOx]

So to make sure I understand you correctly. What you are saying is Obama and his management of financial regulations is so pathetic, and shamefully corrupt; your only option is to compare his actions to other hypothetical time lines to make him look better. Got it.

Re:"have to be the same or better"

[wren337]

My problem with this is, you can't say what the "market" price is when so much of the bidding is in dark pools. You can't look at a 1/8 or smaller sliver and say "that's the market price" - your participation in that market would have changed the price.