50% of AMC’s Volume is Now Trading in Dark Pools

Market News Daily - 50% of AMC's Volume is Now Trading in Dark Pools.
Market News Daily – 50% of AMC’s Volume is Now Trading in Dark Pools.

More than 50% of AMC Entertainment’s (NYSE:AMC) volume is now trading in dark pools.

New data shows that for the month of May, more than 50% of AMC shares have been trading in dark pools consistently.

Gary Gensler announced exclusively on Bloomberg that 90-95% of retail orders don’t go through the lit exchange.

The SEC Chairman says these orders are rerouted to dark pools rather than the NYSE.

Payment for order flow (PFOF) is also partly the reason why orders aren’t processed in the lit exchange.

He says retail orders go to wholesalers in an order-by-order competition.

“In the equity markets right now, if you place a market order, a retail market order, 90-95% do not go to the lit exchanges, do not go to Nasdaq or New York Stock Exchange, they go to wholesalers.

We The Investors Dave Laurer asked the SEC Chairman if dark pools suppressed the price of stock and whether retail investors could influence the price of a stock if majority of orders traded in the lit exchange.

While unsurprisingly there was no direct answer to the suppression of price, the Chairman says that with so much trading happening off-exchange, he doesn’t think it’s a leveled playing field as dark pools give institutions an “unfair advantage”.

“Retail investors as individuals don’t have the power to move the markets, but retail orders combined could have significant price impact.”

Latest AMC Dark Pool Data

Chart Exchange has reported AMC’s dark pool percentage between 49.55%-55.14% in May so far.

Market News Daily - 50% of AMC's Volume is Now Trading in Dark Pools.
Market News Daily – 50% of AMC’s Volume is Now Trading in Dark Pools.

AMC’s average daily trading volume is 33.6 million, though there are day where it trades at have its average volume.

The logic behind heavy dark pool trading is that since more than 50% is not trading in the lit exchange, then more than half of it is not reflecting true retail demand.

According to Investopedia, dark pools are intended to reduce volatility by obscuring large trades

“Dark pools allow large institutional holders to buy or sell in large volumes, without broadcasting information that could affect the wider market.

This allows them to make trades without having to explain their rationale as they look for buyers or sellers.

However, there have been instances of dark pool operators abusing their position to make unethical or illegal trades.

In 2016, Credit Suisse was fined more than $84 million for using its dark pool to trade against its clients.

Another operator, Barclay’s Capital, paid $70 million. Some have argued that dark pools have a built-in conflict of interest and should be more closely regulated.”

Latest AMC News on Franknez.com

Paul Dergarabedian, Comscore senior media analyst predicts AMC Entertainment (NYSE:AMC) revenue will soar this summer as the industry begins to take off.

Disney’s “Guardians of the Galaxy Vol. 3” exceeded box office expectations this past weekend, securing $118.4 million domestically to bring its global total to $289.3 million.

IMAX announced it grossed $25 million from the debut — the company’s biggest global opening thus far in 2023.

Those results, on top of Universal’s “The Super Mario Bros. Movie,” which surpassed $500 million domestically, adds to early momentum heading into the summer box office season.

“I think it’s going to rival the pre-pandemic levels for summer box office,” Paul Dergarabedian, Comscore senior media analyst, told Yahoo Finance.

Dergarabedian says that upcoming films like Pixar’s “Elemental,” Disney’s “The Little Mermaid,” Universal’s “Oppenheimer,” and Warner Bros. “Barbie” as just some of the many films that will drive revenue for AMC Entertainment.

“This is just a bevy of riches on the way at the multiplex,” he said.

You can read the full article here.

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Market News Today - 50% of AMC's Volume is Now Trading in Dark Pools.
Market News Today – 50% of AMC’s Volume is Now Trading in Dark Pools.

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2 Comments

  1. HOWARD SELCER

    Can someone answer this? If stocks that are sold and are not going through the NYSE, is that fraud?

  2. Frank Nez

    Leave your thoughts below.

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