If it sounds a bit like Darth Vader’s 401k, there is a reason. These big transactions are often hidden from the retail market but can move massive volumes of stock and have a big impact on that ticker’s price. Considering a majority happen off-exchange and basically don’t get revealed until after the transaction it is no surprise that they are viewed with a lot of skepticism.

But there is a reason they exist and, most important to you, there are ways to exploit these events if you know what to watch.

Joe Duffy is going to dive into Dark Pools in an event he is offering his subscribers and you can get in if you go here.

Let’s take a look at some of the key characteristics of this seeming mysterious trading and see why it matters.

Why do they exist?

Imagine you are an institutional trader and you have to reallocate a massive position. If you were to flood the market with buy or sell orders for that ticker, the volatility would be insane. It could not only throw that stock into a spin but could potentially have a bigger impact on the sector or even the whole market. Creating a way for these big firms to buy and sell these positions was started to help buffer the impact on the stock price.

Where are the Dark Pools?

Big investment houses and brokerages may run these types of trades to allow them to move positions between internal clients. There are also some high frequency specialized firms that offer dark pools. Even some exchanges will have neutral match makers for these types of trades.

What are the rules?

Many of these dark pool exchanges use the mid point (half way between the bid and ask) as the price for these transactions. Even though the pre transaction data is hidden from public view, these transaction still have to be reported to FINRA and are shown in the data regular traders see with a slight delay.

How can you spot them?

Spotting them is just one part of the puzzle. Since they are reported at a delay, you can still see them but noticing these unusual transactions doesn’t tell the whole story. Even though they have telltale signs like big lots in round numbers, tracking them and using them to your advantage is a whole different ball game.

Joe Duffy has been working on an approach that exploits these unusual trades and the folks using his strategy have been ecstatic. This is why an opportunity to join his small group when he walks them through what he is doing is such a rare opportunity.

This is the kind of opportunity that few have access to. I know I won’t miss it. Grab a spot now.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily