AMC’s Dark pool and off exchange trading has surged as the stock’s trading volume has increased.
The movie theatre chain is currently on a bullish trend, up more than 33% in the past five trading days.
Volume is still above average today but not as high as it was its previous two days.
Despite healthy trading volumes, AMC’s dark pool and off exchange trading are suppressing the stock from much bigger price action.
But AMC isn’t the only one.
Let’s break down the number figures below.
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AMC’s exchange volume comparison
ChartExchange is showing AMC’s off exchange volume today is approximately more than 51%.
The lit volume by comparison is approximately 48.75%.
When retail investors’ money isn’t fully allocated through the lit exchange (NYSE, etc.), not all of the demand reflects in the share price of a security.
This limits the stock’s return potential.
Dark pool and off exchange trading should be regulated and limited as over usage of these transactions tread a fine line between market manipulation.
Retail investors have even called out for the ban of these practices in the market, deeming them ‘predatorial’.
AMC has seen a significant rise in short volume in the past two days, the same time AMC’s retail trading volume began surging.
Taking a look at the broader market and this is simply just the way the markets work.
This means no matter how much volume is moved away from the lit exchange; volume is still a huge component that affects a stock’s share price.
According to ChartExchange, both Tesla and Apple have approximately 48% off exchange trading percentages as well.
GameStop is around 47%.
Comparing the SPY (S&P 500)
The SPY has been having very healthy past few weeks.
We can project more bullish runups are underway in the coming weeks for both small and mid-cap size companies.
SPY’s volume today was significantly below its average of 113 million but managed to beat the market.
The S&P 500 has broken its bearish downtrend and I think we’re going to start seeing many more stocks in the market start to take on this pattern.
What will happen as a result to heavily shorted stocks such as AMC and GameStop?
The surges will result in short seller losses and short covering.
Related: GME shorts face nearly half a billion in losses from surge
Read: AMC’s surging volume will trigger a short squeeze
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