Tag: what is a dark pool

Chicago Tribune Says Citadel Securities’ Dark Pool Targets Small Investors

Market News: Citadel Securities Dark Pools Exposed
Market News: Citadel Securities Dark Pools exposed

The Chicago Tribune just published a piece explaining exactly what retail investors have been warning the SEC about.

Citadel Securities’ dark pool dominates a big part of the financial world, accounting for as much as half of U.S. stock market activity.

The Chicago Tribune says this prominent dark pool is run by Chicago Billionaire Ken Griffin’s Citadel Securities and has been targeting small scale retail investors.

And they’re not wrong.

Dark pools are typically involved in payment for order flow (PFOF), where they pay broker firms to receive retail order flow.

Brokers such as Robinhood and TD Ameritrade accept payment for order flow.

But retail investors have now brought these nefarious practices in the market to light.

Let’s discuss it.

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Taking down Citadel’s dark pool

Citadel Securities Dark Pool
Citadel Securities Dark Pool

The Chicago Tribune has acknowledged investors’ orders almost never make it to the New York Stock Exchange (NYSE) or NASDAQ.

The editorial team say they get redirected to electronic platforms run by private market makers who match buyers with sellers at a price they determine, behind closed doors.

Citadel Securities’ dark pool is able to make money on the difference between bid and ask prices when trades are matched.

This creates major conflict of interest as the orders they fill are not competing against one another; therefore, the price is open for manipulation.

SEC Chairman Gary Gensler said himself 90% to 95% or retail’s orders do not get processed through the lit exchange.

And although light is shining on this very real problem, nothing is being done about it by our regulators yet.

“The U.S. Securities and Exchange Commission is responsible for revising its rules to keep up with technology and, here’s a surprise, the regulators have fallen behind.” – The Chicago Tribune.

But the editor says the problem is the SEC has too much on their hands and are spreading themselves thin.

They’re focused on crypto regulation, SPACs, and climate control.

It’s rather clear dark pools are not the SEC’s main priority.

Citadel Scandal

Citadel Scandal - Ken Griffin Lied
Ken Griffin – Citadel Scandal

Citadel has been heavily scrutinized by retail investors for not only heavily shorting ‘meme stocks’, but for suppressing the price driven by retail demand with its dark pool.

#KenGriffinLied began trending on Twitter earlier this year and again this month when the U.S. House Committee on Financial Services released a report confirming Robinhood and Citadel did indeed have blunt negotiations prior to trading restrictions on January 28th of 2021.

The “GameStopped” report documents in detail the events that lead to the halting of ‘meme stocks’.

Ken Griffin swore under oath that Citadel and Robinhood had no communication the day prior to the restrictions, but proof has now surfaced.

The question now is, will the case dismissed by Judge Cecilia Altonaga late last year get reopened?

The Miami district court judge admitted the Citadel and Robinhood transcripts were suspicious.

However, the federal court has dismissed the case due to a lack of evidence.

According to Business Insider, the court said that the evidence between Citadel Securities and Robinhood was not sufficient.

The retail community found Judge Cecilia Altonaga had ties to the defendant in the Robinhood and Citadel case, creating a major conflict of interest.

But mainstream media isn’t covering this.

What can be done about this corruption in the market?

Wall Street Corruption

If you’ve been one of my day-ones, you know I’ve always preached raising awareness.

Raising awareness is what gets people to learn, dive deep, and stand against market injustices.

People want to fight for a cause, people want to fight for freedom.

Instead of focusing on the things that are out of our control (SEC, market manipulation, etc.), we must focus on the things that are in our control.

And that is raising awareness to educate the population.

I truly believe this is the way to creating real change.

If this resonates with you, please be sure to give this article a social share.

It all starts with us, one by one, as individuals.

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What Are Dark Pools in Stock Trading? (AMC)

What are dark pools in the stock market?
AMC Dark Pool

Dark pools are somewhat of a mystery to new retail investors. We hear about them a lot within the AMC community, especially through Trey’s Trades. We know that they allow hedge funds to make undocumented trades behind doors.

So what exactly are dark pools? And, is something being done about them? I want to expose this subject today.

franknez.com dark pool amc

Welcome to Franknez.com – the blog that protects retail investors from FUD media. Today we’re discussing dark pools.

Lets get started!

What is a dark pool?

A dark pool is basically a financial forum or platform for trading stocks or other securities. Dark pools are privately organized and are known to be an alternative trading system.

These ATS’s are seldomly regulated.

The concerns regarding dark pools and AMC Entertainment has been that we simply don’t know what these communities are hiding from the SEC. This slimy strategy is what’s known as backdoor buying and selling.

Why are dark pools used?

Dark pools give hedge funds an advantage in the sense that they are able to conceal their moves. We can only speculate what type of information is being hid from the public here. Details within these dark pools are not accessible by the trading public.

This lack of transparency may allow dark pools to conceal information such as:

  • The illicit activity of naked shorting
  • Explanations behind millions of fails-to-delivers
  • Any discussion regarding malpractice in the market
  • Inaccurate filings and reports

Dark pools can very well be the place where short sellers get together to discuss strategies and the ruining of companies.

It could be the reason why we don’t know how many short sellers are shorting ‘meme stocks’ and other information that would otherwise prove a fair market for both institutions and retail investors.

Is the SEC looking into dark pools?

SEC dark pools gary gensler

In a recent article regarding the high possibilities of automated margin calls, I point out some research I found on Gary Gensler, Chairman of the SEC.

He publicly announces that the SEC has been observing hedge fund activities since January and are taking action to regulate these entities shorting AMC and other ‘meme stocks’.

One of Gary’s proposals states that hedge funds could face 13-F filings. These filings would provide the SEC with insight on equity as well as dark pool disclosure.

I trust we will begin to see this new chairman make the right calls. It’s time for change and our generation will be the ones to make it happen.

Dark pools could explain the low short borrow fee

Could dark pools be the explanation as to why the short borrow fee is so low for hedge funds shorting AMC and GameStop? Now, because so much information is in the shadows, this of course is only speculation.

According to Investopedia, dark pools can charge lower fees than exchanges because they are often housed within a large firm and not necessarily a bank.

dark pools Investopedia
via. Investopedia

Why do these large firms (hedge funds) have this much power in the first place? This advantage is completely deceitful and unruly. It really does make you look at the SEC and think why in the world has no one taken action sooner.

Are dark pools illegal?

Dark pools are not illegal but they are certainly unethical. Per the SEC, we can expect real regulation to surround these exchanges relatively soon.

Bloomberg Tradebook

bloomberg tradebook dark pool SEC

The Bloomberg Tradebook is a dark pool that is owned by Bloomberg LP. Bloomberg is a financial media company that has been trashing AMC Entertainment for quite some time now.

Bloomberg has published FUD (fear, uncertainty, and doubt) articles in efforts to scare people out of their money. This raises questions regarding the ethics of these manipulators who gather behind close doors in order to stray the public from squeezing shorts out of their positions.

Other dark pool exchanges

Institutions such as Morgan Stanley and Goldman Sachs also offer private trading to their clients through the use of dark pools.

The main concern here is that the information that is made public to the SEC can easily be manipulated. Mainly to conceal foul play and inaccurate information.

The information that is available on Stonk-O-Tracker regarding AMC and dark pools is the percentage of trading within these forums/exchanges; which is usually relatively high.

How does this affect AMC stock?

AMC stock

These private exchanges may be illegally trading naked shares behind close doors refraining AMC’s stock price from further climbing. Although AMC is up nearly 3000% year-to-date, hedge funds continue to attack it through sell walls and short ladder attacks.

And since these private forums could potentially have been getting away with inaccurate reports, the possibility of foul play in the market is certainly there.

AMC Dark Pool Trading

Andrew Hiesinger, CEO of Quant Data took to Twitter to expose AMC’s current dark pool trading volume.

Quant Data provides retail investors with real-time options order flow, alerts, dark pool prints & levels, and news. There has been approximately 34 million shares exchanged in dark pools just in today’s trading day (8/18).

This equates to $1,268,475,800.46 in notional value, says Andrew.

Andrew Hiesinger AMC Dark Pool Data

64.21% of trading in dark pools won’t allow AMC’s stock price to reflect the actual price action. This primarily because this amount of trading is done behind closed doors where buy orders aren’t being reported.

This form of manipulation is clouding AMC’s real share price. #DarkPoolAbuse has been trending on Twitter.

Bookmark this article for updated news on dark pool abuse in AMC.

How can retail investors fight these predatory trading practices?

Retail investors have several advantages over hedge funds shorting AMC and other ‘meme stocks’. The community must stay the course if they are to squeeze these short sellers out of their positions.

Not only are hedge funds losing billions, but the SEC has finally begun to implement new regulations that could automate margin calls in overleveraged accounts. I’m personally not worried. These house of cards are falling at the times they should.

Read: 6 things retail investors holding AMC stock should know

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