Exclusive: Wells Fargo to shut its 'dark pool' as demand falls

Reuters ^ | Thu Oct 16, 2014 | John McCrank

[TigerLikesRooster]

Exclusive: Wells Fargo to shut its 'dark pool' as demand falls

By John McCrank

NEW YORK Thu Oct 16, 2014 6:44pm EDT

(Reuters) - Wells Fargo (WFC.N) is closing down its alternative trading system, or "dark pool," due to decreased customer demand, the company said on Thursday.

The San Francisco-based bank will still offer its clients a full suite of electronic trading tools to help them execute orders, but will stop offering access to the company's dark pool on Friday, a spokeswoman from the bank told Reuters.

[The Working Man]

After having them loose paperwork six times and nearly taking my house because someone went on vacation I don’t think I would trust them to go get my mail. And that is less than a hundred foot walk.

---

You too? I swear that they have an ‘excuse book’.

[Eric in the Ozarks]

I wouldn’t do business with these clowns...

[PAR35]

What the heck is a dark pool anyway?

It's a way for institutional investors to trade stock off the stock exchanges at prices that aren't available to, nor visible to, the general public. They apparently used to let their good customers in on the deal, but will no longer do so - their customers can use bank provided trading tools, but the trades will be executed on the exchanges instead of behind closed doors.

[bert]

Hmmm.... paper work in a computer driven paperless society?

Fax Number? Telephone?

[jimpick]

I have paid directly from my account to a different business and charged palate fee because they posted it later than they withdrew it.

[expat_panama]

What the heck is a dark pool anyway?

It's a way for institutional investors to trade stock off the stock exchanges at prices that aren't available to, nor visible to, the general public.

That's what the journalism grads at Reuters say because they studied under Marxist profs instead of actually learning anything about how money works.  Sure, that explanation sounds good for making evil capitalists look bad, but it makes no sense in the market place --and that's typical for the Marxist slant --and the reason it makes sense to folks who don't do stocks is because we tend to think of market places as places where we buy.  Only w/ stocks we both buy and sell so a great price to buy is a crappy price to sell & vice versa.   So "dark pools" can't possibly be some kind of members only discount stock sales place because nobody sells below market.  Not even big sellers.  Especially big sellers.

There're somewhat better descriptions at WSJ (video), wikipedia, and forbes but they all boil down to the fact that when you and I buy/sell we just post and trade and the market prices are pretty much the same before and after trading a few hundred bux worth.  Bigass institutional dinosaurs who have to buy/sell a few million bux are shafted if they post their entire trade at once because a sell like that can plunge a price for a day or two just like a buy can rocket it up.  So institutional traders don't trade all at once at one place.  They're forced to sell a bit here, a bit there, a bit to a buddy in the next building --anyway they can.  When they keep a low profile is when leftist journalists make up a sinister name, like "dark pool".

[Fightin Whitey]

Did not know that.

Thanks for posting.

[expat_panama]

You're quite welcome!  Of course everything's changing so fast that maybe tomorrow there very well may be something called "dark pools" that actually is sinister --but that's tomorrow so for now we can just take the evening off.

[PAR35]

Well, as those Marxists (given your definition of the term) at Forbes point out:

” dark pools can lead to orders being gamed”

and they provide

“a crack at price improvement and better liquidity”

or, in my words ‘prices that aren’t available to, nor visible to, the general public.’

If you really think it’s a good thing, you shouldn’t be ashamed when someone shines a bit of light on your practices. You all should just laugh about the peons at your country club lunches.

[Lurkina.n.Learnin]

Hey expat. Could you do me a solid and pick me up about 5 thousand shares of Apple for $40 a share this weekend while you’re setting around the club with the good ole boys?

[expat_panama]

...pick me up about 5 thousand shares of Apple for $40...

Exactly!   Right now on overseas exchanges someone's offering to sell 300 shares of AAPL for $108.10 and there's someone else who's made a bid price at 108.04.  The second someone sells at $108.04 or buys at $108.10 we got a trade and the last transacted price (atm @ $108.00) goes to whatever the lucky traders finally agree to.  Nobody but nobody will be willing to sell AAPL at $40 when they can sell at $108.04.  OK, so-called "dark pools" exist for a reason, but being able to buy AAPL @ $40 ain't one of 'em.

Yeah, I know there are magazine articles that say there are dark pools w/ AAPL @ $40, and what that means is all we got being sold is magazines.

[Lurkina.n.Learnin]

“sell 300 shares of AAPL for $108.10 “

It’s hard to believe that the same people that supposedly would jump ahead of your trade and buy that at $108.08 to pick up that .02 off of me would turn around and sell it to their buddy at a $2.00 loss. Either they’re greedy or they ain’t. Make up your mind people.

[expat_panama]

The point of this thread is that we've found out about something we're calling "darkpools" where folks buy&sell stuff to each other privately, and it's not fair because they're getting rich and we're not.  It obviously means the wealthy are cheating the rest of us so we need the government to stop it and take that money from them and give it to us.  Classic Marxism.

[Lurkina.n.Learnin]

” Classic Marxism. “

Sure seems to be a lot of that going on nowadays.

[Wyatt's Torch]

Shut them all down. Absolutely nothing transparent about dark pools and the only one who benefits is the broker.

[Wyatt's Torch]

That’s not the issue with dark pools. There is no market transparency (thus the name dark pool) and the brokers-dealers are not guaranteeing best price available. The broker-dealers are making more money because they don’t have to pay the exchanges.

[expat_panama]

There is no market transparency (thus the name dark pool)

Transparency in a free market is nothing more than the buyer and seller understanding what value is being exchanged.  It does not involve announcing transaction details to anyone else.   An institutional trader has the right to keep his intentions for future trades private.

and the brokers-dealers are not guaranteeing best price available.

Once again, in a free market it's the responsibility of the buyer to know what he wants and is willing to pay.  The seller and the broker are only required to comply with existing laws and the contract terms that all have accepted.

 The broker-dealers are making more money because they don’t have to pay the exchanges.

--and that's good.  In the above example of AAPL, looking at a level II table I'm seeing $109.05 offered and $109.06 asked w/ the amount of shares involved changing constantly. Anyone who trades outside that spread does so at a loss unless there is some outside factor that provides an advantage.  As long as there is no clear fraud, the law does not and should not interfere to judge whether the it's a 'good deal' or not.