Happy Friday! Today's video is sponsored by Blinkist: get a 7-day free trial and 70% off Blinkist Annual Premium by clicking bit.ly/ThePlainBagelMay24 or by scanning the QR code.

@kungfujoe2136

23 күн бұрын

let's say you do a dark pool transactions are plain market manipulation

@kungfujoe2136

23 күн бұрын

btw for cryptobro's off chain transaction = dark pool actions (kinda)

Oops someone pooped in the dark pool

@mulemule

23 күн бұрын

_"Dukeeeeeee ... !"_

@seneca983

23 күн бұрын

LMAO!

Next on a menu, "failure to deliver" and practice of share landing by brokerages.

@Yetus

5 күн бұрын

He’s a shill so he’ll probably tell his viewers “It’s a great idea to lend your shares! Be sure to turn it on!” It won’t hurt your investment at all lol. Unless you know what you’re doing, do not knowingly use or support share lending? PFOF, dark pools, etc.

While I would agree there are legitimate benefits to dark pools for certain traders or types of trades, I'd argue those benefits are only specifically for them, and are at the expense of everyone else. Dark Pools go against the fundamentals of what a public market is meant to be. For example, yes a dark pool would prevent a large pending trade from affecting the market, but I'd argue that it's suppose to affect the market. Any action on the market will affect the market, and that's how it's meant to work. Adjusting to and accounting for market shifts due to things done on the market is itself part of what defines it as being open and public... If we want to allow trades to be private until filled, then they should all be private until filled by default without the need for dark pools. Letting only some people do that undermines the entire system so much that we might as well not even have a public exchange to begin with.

@GregScholfield

23 күн бұрын

Agreed. The workaround to that is to limit how the order is posted or how the trade is worked. A broker is free to post a trade in as many blocks as they would like, creating the illusion that an order is smaller (or potentially bigger) than it really is. Smear those trades across time and you can accomplish the same thing dark liquidity does, arguably faster. I’ve used both trade working algorithms and dark markets and I would prefer to use a lit market algo to get an order filled quickly and with a high degree of pride efficiency. And yes, you could theoretically ban algo trading (lol, try) but then the trader just works the trade manually, accomplishing the same thing at a higher cost. Retails investors can do all of this too, except that it quickly becomes prohibitively expensive. I would argue that a lot of dark market trading is just mental stroking on the part of the trader. Issuers of sufficient market cap to ever fill a large order dark are so liquid an algo would’ve filled it faster and cheaper anyway. Smaller issuers where a big order might be disruptive are going to get filled through a cross.

@samsonsoturian6013

23 күн бұрын

Dude, if you're going to outlaw dark pools, Robinhood will just charge a transparent commission.

@halohaalo2583

23 күн бұрын

Every single market in the world will have exactly the same price. If the price of the security is $100 on the exchange, it will be maybe $100.01 in the dark pool. This is because of arbitrage. A buyer in the dark pool will not accept a higher price than the exchange. A seller on the dark pool will not accept a lower price than the exchange. So you end up with almost the same price everywhere minus the volatility

@testtoon1452

23 күн бұрын

Could not have said it better myself.

@shaunsensei6948

12 күн бұрын

completely agreed

Not surprised. You can pretty much do whatever you want with OTC trades. Edit: I can see a clear advantage in using these pools to avoid those high frequency traders who read or ping the order stack for scalping opportunities.

@samsonsoturian6013

23 күн бұрын

That's basically how Robinhood makes a living. Scalpers pay them rent to access their dark pool.

@AlexanderTheGoodEnough

23 күн бұрын

@@samsonsoturian6013 They do it on EVERY trade, OTC or not. Same goes for ANY brokerage that offers "commission free trading." That's what makes it commission free, HFT firms buying access to order flow. But that's HFTs for you. Want to see something depressing? Look at the property prices around the CBOE servers located in Aurora, IL. That's where some of these guys are physically located, trying to squeeze out microseconds being that close with fiber optic lines so they get their edge over the other HFT players.

Related reading: Dark Pools, by Scott Patterson (2013) Flash Boys, by Michael Lewis (2014)

@TheHunnyRunner

23 күн бұрын

Ten years ago when Flash boys came out, I had the opportunity to sit in lecture and have lunch with professor who wrote some of the HFT algorithms. His lecture started with this "Who's read Flash boys?" *a bunch of Financial Advisors raise hands* "That guy is an idiot. We've been doing this for years. It's not a secret."

@multida

23 күн бұрын

​@@TheHunnyRunnerwhat did he say makes him so idiotic?

@fransliszt

23 күн бұрын

Flash boys just felt like an AD for that one guy's service.

poking the ape nest with this one lmao

@royboyshaw3332

24 күн бұрын

🐵🐵🐵🐵🐵

@TheHunnyRunner

23 күн бұрын

You're not on their radar except if you' happen to be a beneficiary of one of their pension plans. Pension plan beneficiaries could be anyone so, fortunately, managers agree to act in the best interest and take a fiduciary standard of care for those beneficiaries. I would know. I've met them. But they still think most of those beneficiaries are dumb.

@placeholderdoe

23 күн бұрын

That’s probably a part why this video was made. Giving out level headed information on a topic with a lot of bad actors

@TheLargestBlock

23 күн бұрын

@@placeholderdoe Bad actors are on the side of the "apes" too. Lots of benefit to front run retail in both Long and Short, spike the price to drive engagement, sell off on a pump. Easier said than done of course.

@placeholderdoe

23 күн бұрын

@@TheLargestBlock My apologies if I worded in a way that made it seem like I was on the side of the “apes” the bad actors I was referring to were actually the “memestock apes”. Please don’t worry about me, I know that they are a group to stay away from. Have an amazing day!

Can't get enough of the flashes of ominous music in these conspiracy explanation videos lol

@b.o.4469

Күн бұрын

It's not a conspiracy.

The biggest advantage seems to be to the dark pool operators. If Morgan Stanley sees big trades coming on their dark pools and trade on the regular market based on that info before it becomes public knowledge. I assume that’s illegal and they need some kind of firewall between dark pool operations and other systems.

@samsonsoturian6013

23 күн бұрын

That's called frontrunning and is illegal

@tonycrabtree3416

17 күн бұрын

@@samsonsoturian6013And yet, it’s still happening.

great video - thx for making it easy to understand for non-day traders. love your channel

Retail traders at IBKR trade trough darkpools

@ThePlainBagel

23 күн бұрын

I believe it's just IBKR Pro clients no? I was very close to mentioning this in the video but couldn't confirm their platform actively allowed small retail trades to opt for dark pool fills, and I don't use them myself, so I left it out.

@savusilviu

23 күн бұрын

@@ThePlainBagelyou are correct, only IBKR PRO, but that is accessible to retail traders, no need to be a prime account or hedge fund or even SMA. They have access to about 7 dark pools and you can route all or some of your trades exclusively there instead of using their SMART order routing system.

@ThePlainBagel

23 күн бұрын

Good to know, disappointed I didn’t include this then. Thanks for the info!

@savusilviu

23 күн бұрын

@@ThePlainBagel IBKR could be the source for those 100 shares orders because of option contracts.

@Shadowguy456234

23 күн бұрын

@@ThePlainBagel If you are an IKBR client living outside the US, you may only be able to open a Pro account, no matter your funds. This was the case for me.

Super informative as always! Also, good choice of music for those sinister sections lol

Dark pool is Deadpool's investing cousin

Soooooo good and interesting. OTC deals were something I had never completely figured out. Now I do. Many thanks!

Thanks 4 ⭐️ Reportage!

Love your videos Mr. Bagel lol. I have recently found a passion for investing largely due to your channel and really just want to start exploring the markets and researching companies. Not necessarily to invest money right now, just to analyze the business and things that go into its financial position (and hey maybe I can become a strong investor from learning from that perspective). Would love a video going over key things to consider when looking over the financials of a business or even what constitutes whether it’s a good investment or not. I know you don’t go into details on good stocks or anything, just personally I’m stuck with what to research when doing that analysis (equations, statements, etc. or maybe all of those things combined in some way). Love the channel!

It is kind of convenient for large investors and inconvenient for small retail investors. Your explanation helps, but the real intent was to help large traders not "dumb" money.

Love the topic.

This was very informative! Perhaps you could do a similar video on after-market trading, with its pros/cons.

I love when the "conspiracy music" comes on during your videos. It's always on point.

Great video

Thanks! I've been waiting for this for a while.

Super interesting!

Good stuff.

Great video.

I know what a brown pool is. I once made the mistake of going for a swim after eating Taco Bell.

Nice vid, I came fast and joyful

Wow had no idea about these pools ! Thanks a lot as it was very informative 😀

Thanks!

Dark pools is basically stock trading on incognito mode

Hi Plain Bagel, I'm one of your long followers and love all your videos! Super happy about your success after seeing your interview with our PM I have a question: Our interest rates had a cut yesterday. Logically, banks should benefit from this. But I noticed all the bank stocks were down yesterday. Which sector benefits from cuts and which ones suffer from cuts? Thanks!

I encounter order flow bs as soon as I start entering my retail trade, before it's even executed! Often it runs up in price before I can even click buy. When this happens, I cancel the order, wait a few minutes and often get to buy it at the pre-runup price. I can see how orderflow frontrunning can be profitable because most people don't have the patience for this.

Now that we know about Darkpool... could you explain Deadpool, too?

Interesting

What happens in the case of a limit or minimum order in a dark pool where the limit/minimum is not reached for part of or the whole order? Does only part of the order go through, or does the whole just not get filled? I can see how an order for a large trade might be better filled through a dark pool in the case of a limit. If filled on the public market, the security might be artificially priced up or down or be prevented from going up or down with the expectation of a preorder. Only to have the trade never happen or only be partially filled because the limit or minimum was not reached for the entire order.

@thomasa5619

23 күн бұрын

Not sure about the other markets but I was reading ASX documentation a couple years ago and I believe they can enter trades which will only execute when they can be completely filled

The problem with dark pools is that they are only in 1 state and we don't know which one and thus cannot hold them accountable even though I pay in another state. The structure of them legally is like the lottery where each state has them. So any dark pool accountability is likely based on the state you make the transaction. Swaps were the big thing that caused the government to bail out the US. The reason that congress said that they cannot regulate dark pools is likely because of how it is legally structured and knowing what state that dark pools exist in and where their SEC is will give the clearcut regulation as to where the swaps occur. Swaps and these dark pools are the biggest financial risk in America.

@FortuneCookieLies

4 күн бұрын

It is needed because large trades need to find a broker or it will tank the stock.

Do you find that your channel has some correlation with the ups and downs of the market?

Does daily volume count in the darkpool trades?

I’m early! Thank you!

So correct me if I’m wrong but it seems based on this explanation that they’re a tool for large corps to derisk themselves onto unknowing individuals.. so it makes sense why someone would want to sell into them but knowing that why would someone want to buy in the pool?

I'm assuming off exchange includes after hours trading as well? It is after all done outside of the open and public exchange.

Just dumped my 3k gme shares at 46$, finally out of the cult...

@velox__

23 күн бұрын

Good job, that shit isn't healthy

@cumibakar10

23 күн бұрын

Joke’s on you, I unloaded at $70

@b.o.4469

Күн бұрын

Portnoy

@12:00 my thoughts exactly

The plain bagel is getting some sesame seeds on it with this video.

Oh hey, I just watched a video on what happens to delisted stocks yesterday. Neat!

On the point of large volume trades, wouldn't a limit order mitigate changes to the market? If traders saw a pending large volume trade and sold their positions, lowering the price, then the large volume trade wouldn't happen at all, right? Isn't there also the possibility of putting in orders that can be completed piecemeal rather than all at once?

Nice

Who decides when and how many buy orders are moved from lit exchange to OTC?

@ThePlainBagel

23 күн бұрын

Whoever is submitting the trade decides where it gets filled - the institution investor has to actively submit a trade to the relevant platform. Brokers might choose between the two options on behalf of their clients based on whichever offers a better fill, albeit that's where payment for order flow raises a conflict of interest.

@bradthebad01

23 күн бұрын

@@ThePlainBagel I remember seeing a post where GME orders were traded 70 ,80, or as high as 90% OTC during the recent high volume weeks. Is that high percentage of OTC orders normal in the market or an outlier? Thanks!

@ThePlainBagel

23 күн бұрын

@@bradthebad01 definitely an outlier, but could be reflective of high demand. It’s hard to argue what someone’s intentions are from the outside, but with such a volatile stock you could expect more HFT activity, which market makers might move to dark pools to avoid. Again, it’s hard to say

Avanza added this but its goes beyong the scope of EFT, index, stocks and bull/bear. But why dont insiders use dark pools? A CEO would get more protection in this case.

I got one of those in my chamber of schemes.

What’s to stop a customer of pfof from routing sell orders to a lit market and buy orders to dark pools?

also not sure how this is any different than "iceberg" transactions where the system will automatically list another ask for N stocks as soon as N stocks are sold. same affect pretty much

If i have to go through all the hoops and have my trades public for a public company theu should have to too

Dark pools are great It stops the annoying price changes when you sell or buy significant quantities

@savusilviu

23 күн бұрын

Takes vol out of the market. For vol sellers it really sucks.

@Nighthawk20000

23 күн бұрын

Sounds like its only "great" for ridiculously rich people. Another barrier of entry for the normal investor and another advantage for the absurdly rich

@NewSnakeEyes1

23 күн бұрын

Price changes happening when you go to buy or sell is the whole point of a public market... If you want trades to be private then they should all be private.

@homieinthesky8919

23 күн бұрын

​​@@Nighthawk20000 you do realize that dark pool prices change by 10% each trade at times right? Do you think a regular trader would be happy when a stock they buy goes down 10% in a day? There is a reason why there are things called "market makers". Those are the ppl that provide volatility for the average joe on the regular stock exchange

@samsonsoturian6013

23 күн бұрын

​@@savusilviulow volatility is a good thing

Did i hear LIT exchanges? 🔥🔥

A high percentage of GME trades are all OTC. Don't even go to lit market

More than half of GME volume trades off the exchanges... Which greatly kills action discovery and by no means is a "small" trade.

@samsonsoturian6013

23 күн бұрын

Are you complaining that buys don't necessarily push up the price a lot?

@jawmare

23 күн бұрын

off exchange trades get printed to tape within 10 seconds so there is no 'kililng' of price discovery

It's not nefarious. The real intent is to make more money and lose less money due to how markets would respond to lit actions.

@bloodyblase3074

23 күн бұрын

The thing is it ONLY benefits darkpool participants at the expense of everyone else. People who got the shares from someone dumping them wouldn’t know that they’ve been handed a hot potato. And since darkpool mainly facilitates large institutional investors, one could argue that it’s kind of elitist.

@ragnaroksunset

23 күн бұрын

@@bloodyblase3074 oh yeah, my point is precisely that. It's the absolute barest definition of market manipulation. It's just... allowed.

Good explanation. I have no idea why this video is being treated as some sort of ape checkmate lol many of their sentiments are indirectly acknowledged in the video, some are indirectly countered.

So you are not allowed to trade in dark pools but investors can and will invest in them for you with your retirement. Got it

Why should anything done with a security not impact the market? It's still demand for the company... The market is completely manipulated.

Really funny this guy. Started the video saying that dark pools were boring and not nefarious, and then carefully explained how dark pools are used to allow big institutions to dump their shares on retail.

I just saw this on my LVL 3 CFA curriculum, and I don't really think that is very... ejem... ethic?

According to Gensler most of retail's trades are handled via dark pools. Retail trades, more often than not, don't hit the lit market. How did you come to the conclusion that retail traders have no interaction with dark pools?

@ThePlainBagel

12 күн бұрын

"Direct access"

ban high frequency trading or make it impossible by taxing the trades, so OTC trades would be also irrelevant.

Dark pools should be illegal for publicly listed companies or any assets in the open market.

Would dark pools and the hidden trading processes explain why pltr had a great quarter but the stock price went down after the first quarter results were announced? Were retail buyers of pltr played by big institutional investors?

@homieinthesky8919

23 күн бұрын

Dark pools dont change regular stock prices. Its litterally blocked off the regular stock market. Also pltr recently got big US defence contracts and if you have seen the trend of companies using AI getting boosts in stock value pltr is one of those companies.

@WallaceRoseVincent

23 күн бұрын

@@homieinthesky8919 Pltr was probably around 23/share before the earnings call/announcement. Pltr announced a great quarter. Then the price goes down. Do you have any theories as to that odd price action behavior. Thanks in advance.

@MK-gm2mq

23 күн бұрын

Pltr is gonna have a very good run for now

@smallfry8788

23 күн бұрын

​​@@homieinthesky8919 The original commenter has a point. What explains PLTRs great quarter but lower price AFTER a great earnings call!!!!!

honestly if everything operated like a dark pool, there might be a lot less manipulation in the markets on a daily basis

@bloodyblase3074

23 күн бұрын

Lmfao

Dark pool information is very important to long term investors. Look up the average hold time for US equities by institutional investors. It's only 2 to 6 fiscal quarters. No one is building up 10 year positions. This isn't the baby boomer hayday years.

@henryackerson7138

23 күн бұрын

Seems like he was talking about long-term investors meaning retail investors not institutional

Man, I hate when I'm trying to sell and the price keeps going down before my order is filled.

They do sound shady.

Not sure how you can post about all these benefits when trading is a zero sum game. Who's losing out then?

"Allowing large trading houses to trade without affecting the broader market is great for every one!" Hard to fill trades are a feature, not a problem.

@boukie85

23 күн бұрын

this bagel is gonna get creamed all over in a few weeks 📈📈

Dude says you might think dark pools sound like a benefit to bad actor but actually people are getting hurt by bad actors in the dark pools. What?

Anyone who cites dark pool transactions as part of their trade thesis is completely clueless.

You forget to mention about how they use dark pools when a stock gets halted on the way up...eg GME AMC than all of a sudden when trading resumes the stock falls 5-10 % immediately because of dark pool trading while the stock is halted...all in all it should be illegal as it taints real price discovery

@boukie85

23 күн бұрын

he didn't forget it, it's purposefully left out. he is a total clown 🤡 & shill

Posted a link in GME subreddit. Enjoy views. Thanks!

@samsonsoturian6013

23 күн бұрын

What. Have you done...

@hanifarroisimukhlis5989

23 күн бұрын

First of all, are you a sadist or trolling?

From the man who sold you cdos

Richard, man... Stop. Ruining. Conspiracies! I'll miss that ominous music when you will run out of these... 😢 BTW, what is that music? :D

This is the US we are talking about. If there is a regulatory gap institutions will exploit it, and when it blows up in their face taxpayers will bail them out. I believe they call it a virtuous cycle.

You mean it's not fair, rigged for the big guy.

2nd

The market is always unfair if you're stupid or reckless, so get urself informed and educated, it's funny how ppl in the west complain about market fairness when the West is so transparent, Im frm SEA and here it's not as transparent and not as 'fair'

@tomlxyz

23 күн бұрын

Complaining is how you get improvement. complacency makes it worse

Sounds a little bit about inside trading.

@TheSpartan3669

23 күн бұрын

How?

The game is rigged against us.

So a 90s era exchange that is less regulated and mainly used by hedge funds isn't something to worry about?

@tomlxyz

23 күн бұрын

Have you not listened to how they work?

@WannaKnowAll

22 күн бұрын

@@tomlxyz I did, and feel I summarized it quite well.

No... trading off exchanges by market makers is fully okay. Plus they're so irrelevant that volume is often 70-90% of daily trading of a stock. Totally fine and nothing to see here. Please move on.

@boukie85

23 күн бұрын

u get it lol, this shill is so comical... what a 🤡

I can understand if an individual or institution buys a ton of shares thru the dark web. But if a normal person like me purchases a share at the same time 100k other people purchase it, if the exchange routes our purchases through the dark pool without our consent then that supresses the buying pressure. That is price manipulation and indefensible. 💯

@tomlxyz

23 күн бұрын

But that does not happen?

@TheHunnyRunner

23 күн бұрын

Why would the exchange route your purchase through the dark web when the exchange was made to facilitate that trade. They're already making money off you on the bid/ask spread. This makes zero sense.

@azaz6823

23 күн бұрын

@@tomlxyz it happened with AMC and GameStop.

@halohaalo2583

23 күн бұрын

That is not how anything works. Please go and take a course on market fundamentals

@azaz6823

23 күн бұрын

@@halohaalo2583 didn't say that's how it's supposed to work, but it's what happened. Even regulators agreed there were mishandlings. Just research it

Greta Brinkman. It’s not about bbq. 1986

This dude just glosses over FINRA and pretends Darkpools are regulated. He also overlooks how the lack of regulation is often used to move pressure from the open market. But whatever.

@kingcoconut3697

23 күн бұрын

He got his cfa He is going by every rule like everyone else who has experience managing other peoples money

Oh hey I'm early.

@tomlxyz

23 күн бұрын

Hi early

still sounds like another blatantly unfair advantage which exists only for the people who already enjoy every other blatantly unfair advantage to me tell us why failures to deliver aren't a problem next

I don't understand how hiding prices is allowed in a "fair" market.

@DHAGSFU

24 күн бұрын

Did you even watch the video?

@tomlxyz

23 күн бұрын

@@DHAGSFU the comment was written 3 minutes after upload while the video is 20 minutes long. So definitely not

@laserproof

23 күн бұрын

@@DHAGSFU I guarantee I understand it better than you. What's the point of supply and demand if you can hide both, especially when not everyone in the market has that ability edit: I think my replies are off. I can't even respond -- to answer whatever it is you say: the fact that the price can be hidden, no matter how long, defeats the entire purpose of the market. And only a select few people can do it which doesn't make it fair. Now what's your argument?

@halohaalo2583

23 күн бұрын

​@@laserproofbecause ultimately price cannot be hidden for long. If the price at one venue is lower than another then a participant can just arbitrage and pocket the difference.

@laserproof

23 күн бұрын

@@halohaalo2583 but you can still hide it though...

I got a dark pool you can swim in 😮

@JonJon-kx6xl

24 күн бұрын

Don't delete this comment

@tomlxyz

23 күн бұрын

@@JonJon-kx6xl did you just respond to yourself?

@JonJon-kx6xl

23 күн бұрын

@@tomlxyz yeah people delete my comments all the time had to make sure he didn't

FFIE bros?

Man usually you present very reasonably, but you really missed the mark with this one.

@ThePlainBagel

23 күн бұрын

Always open to feedback

@fakenamerealchungus9851

23 күн бұрын

​@@ThePlainBagel you didn't say GME is going to the moon and making investors gorillionaires 0/10

@boukie85

23 күн бұрын

🤡🤡🤡🤡

So that's how they avoid paying taxes

If dark web illegal, why dark pool can be legal?

Crimes happen there

You state dark pool are not for nefarious reasons... Then proceeded with telling us big institutions can potentially "reasons" for selling and buying shares without affecting price (price discovery).