Friday, July 11, 2014

Dark Pools: Who Owns The Stock Market, And Who Benefits?

Source: Rosenblatt via WSJ
Kos's bobswern has republished, with permission, an article by Pam and Russ Martens at Wall Street on Parade called Who Owns the U.S. Stock Market? The answer may not surprise you... I've known a tiny bit about this phenomenon since around 2007 or 2008, when I was working for some very market-oriented people in my next-to-last contract before I retired... but it damned well ought to frighten you even if your only investment is a retirement account or two. The short version (not adequate, but the best I can do in a sentence): a combination of automated trading algorithms, self-trading in "dark" venues, and massive trading venue ownership by the largest investment firms threatens the stability of the invested wealth of literally everybody else. It's not a pretty picture, if you're part of "everybody else."

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