Note from Senior Managing Editor Christina Grieves: In today’s article, Research Analyst Bob Creed pulls back the curtain on one of the most secretive segments of today’s market: Dark Pools. He explains exactly what Dark Pools are and, more importantly, why investors should care about them.
I strongly encourage you to read on and then register for Alexander Green’s upcoming LIVE broadcast with Bill O’Reilly tomorrow, June 3, at 1 p.m. ET. Alex and Bill will be taking a deep dive into these secretive dark trades and sharing how YOU can take advantage of them. In fact, Alex says it’s like legally rigging the stock market in you favor… It’s that powerful.
Simply click here to reserve your spot for the free event. I look forward to seeing you there!
There is a vast part of the market that many investors know very little about… if anything at all.
But as you will learn today, you should become familiar with it… because it currently accounts for a huge portion of transactions. In fact, it rivals the Nasdaq and the New York Stock Exchange.
This chart shows each exchange’s share of our financial markets in 2021.
As you can see, off-exchange trading accounts for 21% of all U.S. transactions.
So what is this mysterious market?
Off-exchange trading – also known as over-the-counter (OTC) or Dark Pool trading – is done directly between two parties without the supervision of an exchange. (It’s basically the Wild West of the stock market.)
Here’s the big difference: Exchanges facilitate liquidity, provide transparency and maintain the current market price. But off-exchange trading information is not necessarily published.
Off-exchange orders are dark, meaning the sizes and prices of the orders are not revealed. These orders are mostly used by sophisticated professional traders and large institutions.
So how do these dark trades work?
One part of the off-exchange market is made up of OTC securities, which are unlisted. These are generally accessible to ordinary investors, but trading here is a little different from buying or selling a conventional stock.
First, an investor places a market order for an OTC security with their broker. The broker must then contact the security’s respective market maker. The market maker will then quote the broker the ask price at which the market maker is willing to sell the security.
Since the order is a market order, the broker must accept the price quoted. The broker will then transfer the necessary funds to the market maker’s account and is subsequently credited with the respective securities.
It sounds simple, and for the most part, it is. But the nature of these investments is the tricky part. You see, OTC securities are riskier than stocks listed on exchanges.
Why? Because they typically belong to smaller companies with small market caps. They’re usually more difficult to research than exchange-listed stocks, and they tend to be extremely illiquid, which can make it hard to find a buyer.
It is also important to note that not all brokers will allow you to invest in these types of securities. If you’re interested in investing in OTC stocks, you should check with your broker to find out if that option is available. If you can make OTC investments, you’ll see the potential for some really big gains.
OTC stocks are only one component of the off-exchange market. Investment banks and other institutions use these Dark Pools to quietly buy and sell huge quantities of conventional stocks.
These dark trades are massive anonymous trades that have a predictable impact on the stock market. And with knowledge of them, you can foresee which stocks are about to soar.
As I mentioned earlier, this type of trading is used mostly by sophisticated professional traders. These Wall Street players are using dark trades to secretly enter positions all the time. They don’t want you to know about these trades because Dark Pools give them a hidden advantage over regular investors.
But that doesn’t mean you have to miss out on the big returns Wall Street gains from these private transactions.
You see, Chief Investment Strategist Alexander Green has found a way to leverage dark trades in his highly popular Momentum Alert trading research service. He tracks these trades as a signal that a stock is about to take off, then shares that research with his readers so they have the chance to get in before the big gains.
In 2021 alone, his Momentum Alert subscribers have seen the chance to realize 194%, 251% and 285% gains in a matter of months.
So are you ready to learn more about these Dark Pools and how you can benefit? Well, make sure you tune in to Alex’s upcoming presentation with renowned journalist – and longtime subscriber – Bill O’Reilly tomorrow, June 3, at 1 p.m. ET.
During their LIVE broadcast, Alex will reveal how he uncovers these massive private trades and how you can use them to your advantage – one of the biggest advantages you can get in today’s markets. Simply click here to reserve your spot.
Click here to watch Alex’s latest video update.