The Market You Can’t See: Dark Pools, Off-Exchange Trading and the Hidden Side of Liquidity
Note sull'episodio
In Episode 7 of The Liquidity Game, we investigate the hidden side of modern market structure: dark pools, alternative trading systems, internalization, and off-exchange trading.
Why would an institution want to trade without showing its full order publicly? What exactly is a dark pool? How is an ATS different from an exchange? Why do wholesalers execute so much retail order flow away from public markets? And what happens when a massive institutional order needs to trade without advertising itself to every trader watching the book?
We break down:
dark pools, ATSs, off-exchange trading, midpoint execution, internalization, block trades, hidden liquidity, trade reporting, market impact, information leakage, fragmentation, price discovery, and the limits of Level 2.
We also examine some of the biggest myths surrounding hidden liquidity:
Does a huge dark-pool print mean an institution is buying? Are dark-pool trades invisible forever? Is off-exchange volume automatically bullish or bearish? Do dark pools exist to manipulate retail traders? Can institutions buy huge positions without moving price? And if Level 2 doesn’t show every buyer and seller, what exactly are traders seeing?
The deeper question is:
How do you understand price discovery when some liquidity is visible before the trade and some only becomes visible after it happens?
The Liquidity Game — Markets. Risk. Psychology. Execution.