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With Flash Eliminated, The Focus Now Shifts To Dark Pools
Now that Flash trading is practically a thing of the past, everyone's attention is shifting to dark pools. And if the just released letter by the World Federation of Exchanges is any indication, dark pools' days could be comparably numbered.
Dark pools are off-exchange trading venues, or Alternative Trading Systems (ATS) which are largely unregulated, allowing participants to transact in large blocks without disclosing trading intentions until long after the trade has been executed if at all. For the most part dark pools are run by investment banks themselves, with Goldman's Sigma X being a highly visible (pun intended) example, and one extensively discussed previously on Zero Hedge. The one prevailing characteristic of dark pools is the secrecy of transactions, revealed only to select transacting members. In their letter, the WFE warns that the "heightened opacity of these platforms in many countries inhibits
price discovery and may lead to negative outcomes, including increased
market volatility."
And while proponents of dark pools use the now all too generic explanation of enhanced liquidity, the question of whom this liquidity benefits is still an open one. The preliminary answer: only those who have access to such ATS venues benefit from the liquidity, which inherently is predominantly provided by the inventory of the ATS operator. As such it is merely a means of a firm like Goldman to offload proprietary positions to select clients.
Some notable concerns with dark pools stems from the very nature of the SEC's Regulation ATS "Fair Access Rules" which basically state that dark pools are non-democratic hierarchical organizations, with the ATS having veto power over who is allowed to trade on any given venue.
Probably the biggest complaint about dark pools has to do with the concept of actionable IOIs which are the practical (but not identical) equivalent of Flash orders on regulated exchanges. In an actionable IOI a firm seeking a bid or an offer will send out a ping to a subset of members, which never ends up in the public domain, and give the select dark pool participants a first and only look at whatever is about to hit the tape.
The WFE letter focuses on the same principles that Senator Kaufman has highlighted in his campaign for elimination of trading tiers and creating a level playing field.
There are two interconnected concerns of exchanges which merit the attention of G-20 leaders. First is the absence of a level playing field between exchanges and other entities performing some of the same or similar functions. Second is an erosion of price discovery arising from recent trends. As discussed below, these phenomena may be compromising the role of the public, regulated marketplace, and hampering exchanges' ability to fulfill their macroeconomic role.
And expanding on the loss of the level playing field:
In many jurisdictions, the introduction of alternative order execution platforms has led to significant internalization of order flow and related practices. These practices limit the visibility of orders, hampering investors' ability to respond to them and diluting the price discovery process. These practices also reduce the market participants' and regulators' ability, in many instances, to see overall market activity and may impact the conduct of proper market surveillance.
At the end of the day, all investors need to have confidence in the reliability of information reflected in the prices at which securities transactions occur. The heightened opacity of certain trading venues in many countries inhibits price discovery and may lead to negative outcomes, including increased market volatility.
The WFE Board believes that the current environment is creating an unequal distribution of the costs of providing a capital markets infrastructure at the expense of regulated markets and to the advantage of alternative trading venues. Regulated exchanges welcome competition, but it should not be structured in ways that can affect the quality of market operations and the soundness of the price discovery process. There have been new entrants with distinctive business models that have made significant contributions to our industry. The exchange industry is open to newcomers but it should be on a level playing field.
And the WFE's recommendation to the G-20 leaders:
The WFE Board recommends that the G-20 leaders consult with investor organizations about how they would wish to see orders executed in the markets, and determine whether alternative trading venues have reducing the total costs of transacting by investors.
The WFE Board also asks G20 leaders to assure a level playing field for the responsibilities assumed by all securities order execution venues. This would remedy many capital markets uncertainties. assuring greater transparency, greater fairness, and a more level competitive field.
The WFE points out that divergence even within the dark pool venue propagation, distinguishing between exchange operated and external dark pool operations.
Recently, some exchanges have accommodated these demands by creating order types or opening segments that allow trading that is not immediately visible to the rest of the market. In the case of exchanges, this trading is nonetheless tied into the visible market's surveillance and position-monitoring in order to assure the oversight of total market operations.
Other execution venues also offering dark trading in so-called "dark pools," but their trading and clients' positions are not visible for surveillance purposes. Regulators have no way to evaluate the risks which may be inherent in the combined on-exchange/off-exchange dark pool activities, nor what effects they might have on the visible markets.
Taken together, the combination of the absence of a level playing field between execution venues and decreased market transparency is an unsettling development. The policies and practices that exchanges have developed to ensure fair, orderly markets are at risk of becoming less meaningful and less available to investors and listed companies.
One could argue that here is where exchanges are hypocritical and one would be right. If the risk tolerance of an exchange operated dark pool if only mitigated by the fact that it is "regulated" by the SEC which is not only still trying to figure out what is going on 20 years ago, it would be remiss to state that the regulators will have any clue of any shady activity occurring on an exchange dark pool until it is far too late. Let's not forget that the SEC allowed Flash trading to exist only to seek to ban it several years later.
And while the pushback to the Flash ban has been relatively muted due to the lack of major market players who endorse it, the same can not be said of dark pools, which in effect positions two highly integrated and symbiotic players against each other. It would be amusing to watch the NYSE and Goldman Sachs, two integrated players in the market landscape, especially with the latter providing well over 20% of the NYSE open exchange liquidity via SLP, yet Goldman also dominating the dark pool arena via Sigma X. Is the trade off to the NYSE to antagonize Goldman, especially with Mr. Niederauer at the helm, a former Goldmanite, and potentially lose billions in exchange fees if it were to unwind the SLP monopolized by Goldman? Of course not. Which is why this push for yet another domino in the tiered market system to be toppled will have to come via regulatory and legislative intervention. Senators Kaufman and Schumer - the investing world is looking to you to continue your pursuit of a "level playing field" - your next step is the elimination of the entire dark pool concept.
Letter by the WFE to the G-20 presented below.
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Call me a cynic but just because flash trading is supposed to end soon (it has not ended yet) what makes anyone think it will actually cease and desist?
Are we actually expecting the SEC and FINRA to be watching the hen house and enforcing compliance? Please, compliance is for the plebs.
$50 says the major houses will be "caught" flash trading this time next year.
A "free market" system runs on price discovery. Dark pools exist, by definition, to thwart price discovery.
Maxine Waters on Bloomberg TV now talking about CDS etc... brilliant
I assume there will be a significant decline in volume without flash, but meaningless volume except for those behind the scenes that profit off of it. Should be interesting.
If it's not illegal it's still alive. Trust and believe my brother.
Poll
Which is worse:
1) Another Obama Speech?
2) Discovering you have The New H1N1 virus mutation?
Easy #1.
All i hear now when he opens his mouth is yadda, yadda, yadda.......
Of course one can't take the credit of exposing all those tricks away from zerohedge,which by far exceeds any other msm or alternative real media sources. And I think the general public is probably unaware of zerohedge's efforts in that field. However,having said all that,I still think the market will always be manupulated one way or another,due to the way it is conducted,and not necessarily just due to tricks followed. Look at it this way,the price you pay or recieve for whatever you buy or sell is controlled by MMs and not by normal supply and demand. What logic can explain that a company sold for $10 back in NOV is selling now for $50?after all, the only gauge available for a price,is whether a competitor could buy this compay or not.............
While your at it why doesn't someone get some answers as to how this is not a transfer of wealth?
Fed admits hiding gold swap arrangements
Warsh wrote in part: "In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."
http://www.gata.org/node/7819
Let's not forget Draghi is a former GS MD as well.
Shining a light on dark pools by sending out their quotes to the consolidated tape would be the greatest gift possible to HF and human day traders.
Flash is meaningless to retail, as there is no way to predict a follow-on order to a "one and done" trade.
Where Flash concerns retail is when dumb fund managers that retail "investors" hold units of iceberg a large block on an exchange that flashes (something I have no sympathy for, given the utter stupidity of the fund in their order execution).
However - if dark pools cease to exist, there will be no way for funds (which largely are there for the theoretical if not practical) benefit of retail investors to move large blocks without tipping their hand.
I would expect to make quite an incremental profit on my trading if dark pools are eliminated (or illuminated), and it would all be at the expense of large funds (mutual, pension and endowment among others).
If as the SEC stated recently in discussion of Flash, the SEC will adopt regulations that benefit the long term investor above the short term speculator when the 2 are at odds with each other, then it seems clear that any rationale thinking person would support the continued existence of dark pools, regardless of how scary Tyler makes it sound.
Dark pool movement was also critized during the Great Depression for causing mark turmoil, Gann spoke about it several times, I'll look up some quotes tonight. However, because any institution is so dumb as to not hire traders to dump those off, it shouldn't be at the individuals expense. Instead they rely on a cheap silk screen that allows so much corruption. A free market would allow us both to see each others order, no matter how many shares there are.
But your right, that's a tough law to pass and I'd be surprised if it does get squashed... who knows, we might get change we can believe in also.
Wow I had to edit that, not thinking much today.
Here is the "real issue"....
If the "House" owns the exchange....then just why is it that
they cannot game the exchange that they own....?
And...THEY have a point....
Who takes the risk...of owning the exchange ?
It is clearly not the govt....
Thus just how is it that the govt. should control
or regulate the symbol of capitalism's core ?
.........................
Thus the real question becomes fairness....and the ability
of the "House" to stay in business....
.........................
Before...many humans made up an exchange....now an
exchange is just "software"....
Thus the question becomes....what does an exchange do ?
Today....it serves as a direct access electronically
time stamped ownership changer....
..................................
Here's another major issue....
Defragmentation....exchanges must be defragmented in
order to be easily regulated....
................................
The other issue....
Information....core basic information should be
systematic and wiki based....
...........................
Low cost....perhaps 20 cents per 100 units....
Why should 100 units cost 20 cents with the BATS
model....versus $30 with some other model....
..........................
What is clear....
Public securities must go through PUBLIC PRICE
DISCOVERY....
This means no internal matching such as BlackRock,
Goldman, and others with mass are proposing....
..........................
What must happen....
A defragmented....first come first served....
direct access electronic "BATS model" ....
where the cost is the same to any party....
ie 20 cents per 100 units....
All public securities classes should have to trade on this
venue....
And all core information should be fact-wiki based....
Given that ZeroHedge and a large majority of its readers consistently express a view that high frequency "pattern mapping" algo's are "unfair" and that flash trading is "unfair" it's simply mind boggling that they also are on a rampage against dark pools. There is a quote in this post: "These practices (dark pools) limit the visibility of orders, hampering investors' ability to respond to them and diluting the price discovery process"
yet there has been a campaign here for the better part of a year against high frequency traders who do exactly that - respond to visible orders, process them, and react to them faster than anyone else can. And the idea that dark pools enable traders to "unfairly" execute large volume orders at small volume prices is flat out absurd - volume is volume. One cannot buy a million shares in a dark pool unless another is willing to sell him a millions shares.
How can the ideal market not be one big dark exchange where no one can see the order book - there need not even be a bid/ask spread - all we need is a single visible price: you just need to decide IF you want to transact, not HOW to transact. All the computers that react to the visible orders in the marketplace are not rendered moot - because there are no visible orders in the marketplace.
It's clear that the minions don't understand dark pools - since a campaign against dark pools - which level the field in favor of the common man and AGAINST the evil high frequency traders simply makes no sense. The dark pools are where you go to hide from the guys who trade better and faster than you - the HFT algo's.
Bring it on kids - someone attempt to intelligently explain why one big dark marketplace wouldn't be ideal...
non-finance guy here.
you're so caught up in your mindset that you don't see the forest for the trees. the objections to hft and dark pools aren't about opacity or transparency per se, they're about a level playing field. In the case of dark pools, opacity is a proxy term for lack of level playing field. in the case of hft, there is an opacity (you're fleecing us and we don't know it) but the main objection is... you're just a bunch of fucking cheaters.
other than your insatiable appetite for bigger bonuses, has the ego blow of figuring out what we all knew - you're certainly not smarter than us, and likely a good deal dumber - changed your tune about whether you can rack up outsize profits based on your brain? sure sounds like it...
a) i do not work on wall street anymore - quite two years ago - so it's not "me" you should be hating
now: what you fail to understand is that the "darker" the market, the MORE level the playing field - the harder it is for the smart people to figure out what you're doing and capitalize on it (note: that's not illegal - it's called trading - it's the core of all capital markets - capitalizing on information). the more open the market, the more the best can excel - see: HFT. You think HFT is cheating because that's what ZH has told you and you don't understand it. Is it necessary to have the market become a war of technology leveled in microseconds? maybe not - but that's a different debate.
The way to make the playing field MORE level is to have LESS information - because when you have more information, there are always people who will be able to process this information better.
stipulated that I'm not a finance guy...
am hoping one of thems will interject here and fight my battle for me...
i obviously mean you no harm. you *should* however be gravely concerned by the presence of the non-finance folks on this blog. there are many of us who bought the unfettered markets ideology hook line and sinker; who used to think ron paul and glen beck and bonddad and faber (folks who come from across the entirety of the political spectrum) were insane tin foilers. we no longer think that and the long term damage that will exact on the market is FAR graver than any short term profits ya'll might take.
You are bantering with a moral and ethical retard. Unfortunately this lack of character is now being sold as the "new smart". There isn't much new under the sun and when you strip away the terminology and technology inolved with dark pools you have good old fashioned theft, greed and corruption in the markets. Nothing new here, nothing smart here. Dark pool - just a fancy name for bucket shop.
Anon - the only worrisome thing is that people come here, read stuff, don't understand it, and blindly follow along with pitchforks when a little thought might result in a lightbulb going off in their heads.
this issue is a simple basic high level one: some people don't like the fact that there are other people out there who trade better and faster than they do. Fine - that's a view one can reasonably have. However, if you have that view, that it's unfair that others can better utilize information than you, and that it makes the playing field "unlevel," then you can't really also be against the venue where people go to escape from such "predators" - which is the dark pools. The dark pools make the playing field MORE LEVEL. Maybe that's a place to start - is the current dark pool configuration ideal? maybe not. is it BETTER than if we had no dark pools, and the HFT players could just own you all day long? I think so. could it be perfected if all the dark pools were consolidated into a single pool? yes - again, i think so.
Dear Mr. Dynamite,
The issue here has nothing to do with "trading better " or being "smarter". The issues here are market integrity and market structure. Your assertions about dark pools are simply wrong.
Anyone should be able to buy and sell practically anything for any price or under any terms for which they can find a willing partner.
That said, if the markets are presented to the public as fair and open, and as having effective oversight, then the existence of private, non-reporting off-exchange alternate settlement mechanisms should at least be publicly reported. J6P was encouraged to invest for his retirement in the stock markets via IRAs, etc. He was never told that the capital markets were a casino that can actually be manipulated. Wait a sec; if the markets CAN actually be manipulated in real time, then it's not even a casino, is it? It's a casino where the outcome of the games is actively managed. A rigged casino implies theft from an unsuspecting public, not skill, and might not even be allowed to operate in Vegas (or would it?). Is J6P too trusting and undereducated when it comes to "investing"? Absolutely.
The error in your logic is that you assume LESS information is available to all parties as a result of dark pools. Given the absurd trading records of firms like GS in recent times, the premise of your argument is likely wrong.
Who is to say that the select few don't have visibility into exactly what's happening within the dark pools? And that would give them a huge edge against anyone who didn't.
Less information makes a better playing field????
Do you really think the big boys will *EVER* have less information or accept it? Not likely, we might, but not them.'
We have enough traders in the world, the markets should outlaw AI's, Neural Network and HFT... let price discovery be a truly human concept, not a computerized one.
Yes, Phaesed - since the professionals will always be able to do more with the information than Joe Sixpack will, if you nullify that input, it levels the playing field. It's not a complicated concept.
"In the case of dark pools, opacity is a proxy term for lack of level playing field."
That fact is that dark pools were created for pro traders who *realize* that they are not as skilled as the best HF traders and are attempting to change market structure to stem their losses to better traders. (Hey, isn't that what ZH is all about?)
Of course this never works, because the better traders always figure out a way to make money from the dumb ones. As long as their are people with more money than brains, it will keep getting transferred to people with bigger brains. Is it "unfair" or "not a level playing field"? Who cares, it is practically a law of physics.
Change the rules all you want, by the time you figure out what's going on, the same guys will be kicking your ass yet again.
Flash =! HFT.
correct. flash trading is not equal to HFT. although the beef that some have with flash trading is that they say HFT players use the flash quotes to step ahead of flash orders rather than fill the flash orders.
Hate HFT because you're against free markets capitalism. Hate flash trading because you don't understand it. Hate dark pools because you're a pure free markets capitalist (??) - but you can't really be consistent and hate all three - like ZH does.
Well said. But don't forget they also hate rebates for adding liquidity. I can't for the life of me figure what the logic is there.
The logic is simple. Another way for the large insiders to "make work" for which they can then slice off a few cents for the privilege.
Then the logic is wrong: it's easy to get a retail account that will pay you rebates when you add liquidity. For many of my trades, when I can be patient, I add liquidity and am paid a rebate which more than pays for the commission.
WTF man?!
Your argument is like me mugging you, you complaining, and my using the fact I can easily kick your ass as a defense that mugging you is just "capitalism".
None of those are capitalistic, because all of those benefit only those who have the resources to game the system.
"Bring it on kids - someone attempt to intelligently explain why one big dark marketplace wouldn't be ideal..."
Ideal is hard to say, but a completely dark marketplace (i.e., no bid/ask, no history) might have some advantages. Most of modern technical analysis would be rendered useless. Instead of the nice "continuous" price history we have now, you'd be stuck with your own log of time and sales. If you don't trade, you don't have knowledge about where the market is.
Fundamental analysis would be king again. You couldn't just surf trendlines, RSI and all that, you'd have to actually determine the value of a security by other means.
Perhaps traders would start reading balance sheets again.
i wasn't thinking that we'd have no tape - we'd still have trade histories - but now that you mention it, maybe we don't need to have public ones...
Wow. Tyler mentioned the ioi's that exist in dark pools which are very similar to flash trading.
So I ask you, in a market essentially composed of one large dark pool, how would the SEC regulate/prevent ioi's?
I really am failing to see how this would help the retail investor.
All these dark pools are just gussied up bucket shops, wholly illegal.
I though this was about the big Dark Pools of oil that show there is no recovery.
My bad.
Erin Burnett was on fire this morning, calling Social Security a Ponzi Scheme.
Get'em tiger!
http://cdn.maxim.com/36501-37000/36525_erin_burnett.jpg
This is going to be a lot of fun :-)
Going after ACORN may be like shooting fish in a barrel lately -- but jumpy lawmakers used a bazooka to do it last week and may have blown up some of their longtime allies in the process.
The congressional legislation intended to defund ACORN, passed with broad bipartisan support, is written so broadly that it applies to "any organization" that has been charged with breaking federal or state election laws, lobbying disclosure laws, campaign finance laws or filing fraudulent paperwork with any federal or state agency. It also applies to any of the employees, contractors or other folks affiliated with a group charged with any of those things.
In other words, the bill could plausibly defund the entire military-industrial complex. Whoops.
Rep. Alan Grayson (D-Fla.) picked up on the legislative overreach and asked the Project on Government Oversight (POGO) to sift through its database to find which contractors might be caught in the ACORN net.
Lockheed Martin and Northrop Gumman both popped up quickly, with 20 fraud cases between them, and the longer list is a Who's Who of weapons manufacturers and defense contractors.
The language was written by the GOP and filed as a "motion to recommit" in the House, where it passed 345-75.
POGO is reaching out to its members to identify other companies who have engaged in the type of misconduct that would make them ineligible for federal funds.
Grayson then intends to file that list in the legislative history that goes along with the bill so that judges can reference it when determining whether a company should be denied federal funds.
Read more at: http://www.huffingtonpost.com/2009/09/22/whoops-anti-acorn-bill-ro_n_294...
FAIL. XD
Sell Sell Sell sell all defense contractors.
What is funny is that ACORN or any present employ is not indicted of fraud, ever so they will keep getting federal money
HA HA
Rearranging deck chairs on the Titanic...
What evidence is there that HFT has become a thing of the past?
They'll continue doing it until the very last second they can whereby the profits outweight the fines. I've seen no evidence that they've crossed that line yet
Dude, it's flash trading they will supposedly ban, not high frequency trading (HFT).
Two different things. Don't confuse one for the other.
HFT should be next up along with dark pools...
Well we still need to get flash trading put to bed... and our fearless leader at the SEC is extending the pain by allowing a comment period.
Which brings us to a priority before we get to dark pool-- end the SLP fiasco between the NYSE and Goldman Sachs. For some strange reason, this didn't need a comment period to get "approved", and Goldman appears to be churning away with little real competiton for those rebate morsels.
With the end of flash trading in sight (we presume), there really shouldn't be a need for Goldman to provide a front as a "liquidity provider", when it's really been a front-runner. Removing the program should be a precursor to burying Sigma-X six feet under.
i think internalisation should be eliminated and all orders routed to the open marketplace. imo the dark pools are just another gimmick the investment banks are using to lure in trading business. an edge to trade with them, since trading is their top line rev source. i see it as an elitist thing kind of like the poker tables, where one area is for the general public and this dark pool area is for the high stakes player. this way pension plans and large position holders, don't have to deal with all the "noise" trades and "entitle themselves" to operate in the more "fundamental" portion of the trade. not with all the "rif raf".
if the dark pools are allowed to be used, numerous ones could spring up all over and soon the market could be highly fragmented, price discovery difficult, equities illiquid save the dark pool bucket shop. this seems like a great way to get pensions into the bucket shops while the investment houses fleece them. quite the business model where the revenue comes from trading activity and the prop trading desk internalises them in the dark abyss of these pools.
i guess this is what a maturing or declining market system looks like. perhaps this is the process of creative destruction we are in the midst of. a period where over the next several years the market system re acquaints itself with price discovery as it couples together the use of knowledge capital. in the meantime, where ever there is illiquidity, prices require discounts outside relative more liquid dark pool operations. whilst inside the respective dark pool of capital some form of liquidity will reside coupled with fleecing and carnage.
this is no place for the pension plan managers. the current market system is complex enough, adding dark pools "elitist trading arenas" is just adding more complexity.
the fix: stop internalisation, and route the trades into the open marketplace. the internet has shown the value of open systems, let's not take the system down the path of becoming private equity to pursue the short term goals of GS, JPM, and MS, et all.
There are already over 40 dark pools for US equities alone. But only two or three have the lion's volume due to their participant composition. ie. the big trades need to play where the big traders play.
Liquidnet, among others, has no investment bank-type ownership and it is not (yet) a public company - although it intended on returning equity to its employees before the markets roiled and delayed any IPO intentions.
There are unique tactical and strategic avenues ahead for all the dark pools - liquidity risk, price integrity (all the original reasons for their insurgence) et al being different approaches tying back to the ownership structure I discussed below.
It is true - transparency is a paramount issue. But "whose" transparency hasn't come up as an adequate talking point yet. I agree that there is a tendency for a level playing field for everyone. Whether going that far as a solution, is worse than the problem - is still being debated.
The SEC will start opening up these discussions soon as well. Then watch the tactical/strategic maneuvers surface. This will take some time; I expect around Q1 2010.
-vreporter
The dark pool discussion has several layers - one of them pertains to "ownership structure." Sigma X has an ownership composed of institutions that require a Chinese wall to separate the conflicts of interest. Privately-held Liquidnet, on the other hand, has a membership structure composed strictly of buy-side players. We will get a layered approach to the dark pool issue due to the very "need" for dark pools - buy-siders wishing to cloak their execution intentions from the sell-side types of strategies that cost them slippage in managing their positions.
It could be argued that there is nothing wrong with buy-siders executing "internally" (with each other) before reaching for liquidity elsewhere - and that's where the rules need changing.
-vreporter
I could use a little further explanation. I have a basic understanding of what Flash Trading is/was and now have a basic understanding of what dark pools are. By implementing these regulations against these types of trading what is it actually accomplishing for the markets and for the concept of trading? Are these necessary steps prior to massive overhaul or are these steps merely political appeasement to make it look like these governmental regulators aren’t just standing around with there &$^# in their hand?
As I'm sure we all know, stocks are not traded only on the NYSE or even the Pacific or American Stock Exchange
and yet, even the smallest exchange plays a role in price discovery, especially in after-hours trading.
Still, as has been mentioned several times in this thread, for every buyer a seller. A seller can be short.
In a small, essentially blocked access exchange, a short seller can meet a willing buyer at a price far below the close. Since larger exchanges take their cues from the ticker, it is unlikely that seeing a trade of even 100 shares at 3% below (or above, especially recently) will bring in a wave of buyers willing to pay a 3% premium or a seller willing to take a 3% loss except that tight stops often trigger on such moves and this opens the door to accumulation of large blocks. While I haven't explained this to my satisfaction, hopefully the gist of what is taking place in these dark pools can be deduced.
That does make a little more sense about how they fit in in the grand scheme. Thank you.