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Question: Do you like dark pools ?
Yes
No
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Author Topic: Bitcoin Central, now featuring dark pools !  (Read 6614 times)
davout
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January 07, 2011, 05:41:29 PM
 #1

Yup, that's right.
Minimal size is 3k BTC for a dark pool order

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davout
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January 08, 2011, 09:25:11 AM
 #2

If no why ?

ColdHardMetal
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January 08, 2011, 09:56:30 AM
 #3

If no why ?

Because if I want to trade at price X I want to know I'm going to get price X and not have my trade filled at some price that might not be anything like what I am looking for.

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January 08, 2011, 10:04:19 AM
 #4

If no why ?

Because if I want to trade at price X I want to know I'm going to get price X and not have my trade filled at some price that might not be anything like what I am looking for.

I mean maybe functionally that would never happen, or the price difference would always be to my advantage. Like I would end up selling for more than I expected or buying for less. I'd just rather know in advance.

The only trading I've ever really done has been on currency markets where you just get filled at the spot price right that instant, and don't need to worry about whether the price you are seeing on the screen is what is actually available. No dark pools of any kind, but also markets that are really deep and there is no order book. Just dealing directly with a market maker that gives a bid/ask spread and that's it. This kind of exchange is different than what I'm used to so maybe I just don't like change Smiley

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January 08, 2011, 10:41:02 AM
 #5

I don't understand what the benefit of a dark pool is. Can you explain why someone would use the dark pool? Or why someone wouldn't use the normal pool and should only use the dark pool?
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January 08, 2011, 10:52:26 AM
 #6

I don't understand what the benefit of a dark pool is. Can you explain why someone would use the dark pool? Or why someone wouldn't use the normal pool and should only use the dark pool?

I guess the theory would be that since these are shallow markets placing large orders will move the price too much. I don't really see how it helps someone get a better price though. If their order has to be filled, whether it's visible or not, before the price breaks through a certain level then people being able to see that the order is there shouldn't matter in my view.

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January 08, 2011, 05:40:42 PM
 #7

I guess the theory would be that since these are shallow markets placing large orders will move the price too much.
Yes

I don't really see how it helps someone get a better price though. If their order has to be filled, whether it's visible or not, before the price breaks through a certain level then people being able to see that the order is there shouldn't matter in my view.
I see it merely as a convenience for people who think it does matter, placing a dark pool order is much easier than writing a trading bot that will progressively place bids/asks until their need has been satisfied.

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January 09, 2011, 12:06:07 AM
 #8

dark pools do add stability to the market price. but at the cost of transparency.

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

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January 09, 2011, 12:27:16 AM
 #9

And you will report the trades (volume and price) after the fact like MtGox, correct?
doublec
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January 09, 2011, 12:30:13 AM
 #10

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

If the volume is hidden though it discourages me from using the market. If people use the dark pool then the volume on the market always appears low and makes me think there's no trading going on. So I look for a busier market or assume bitcoin is not being traded.
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January 09, 2011, 12:48:02 AM
 #11

davout: have you given any thought to the idea of compromising between transparency and stability, by hiding only the dark pool order volume, but not the fact that an order exists?

If the volume is hidden though it discourages me from using the market. If people use the dark pool then the volume on the market always appears low and makes me think there's no trading going on. So I look for a busier market or assume bitcoin is not being traded.

so you'd rather not have the dark pools at all, i take it?

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January 09, 2011, 02:39:48 AM
 #12

No, the market should be open and free to move in price by the forces everyone imparts on it. I rather not even had the concept introduced. Volume is a great indicator when performing Technical Analysis and S3052 could come and explain us more. I believe he has access to MtGox's darkpool so he can surely tell us by facts.

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January 09, 2011, 03:23:48 AM
 #13

so you'd rather not have the dark pools at all, i take it?

Correct, I'd rather not have dark pools. Mainly because I don't understand why they exist and it seems harmful to me. It seems to me that the point of a market is to trade the currency with the price reflecting demand. Don't dark pools defeat this?
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January 09, 2011, 08:29:19 AM
 #14

What is the benefit of having an orders appear at all? What would happen if they were all dark pools?

I suppose we would get in the habit of making offers that we thought we're absurdly good for ourselves to see if they fill, then make them a little better a little at a time until they get taken or we don't want to go any lower. Fumbling around in the dark so to speak. But ultimately what's changed? The impatient pay more or get less, maybe it's a good way to price discriminate. They aren't likely to leave for another market over it since they aren't too price sensitive anyway.
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January 09, 2011, 08:39:07 AM
 #15

What is the benefit of having an orders appear at all? What would happen if they were all dark pools?

I suppose we would get in the habit of making offers that we thought we're absurdly good for ourselves to see if they fill, then make them a little better a little at a time until they get taken or we don't want to go any lower. Fumbling around in the dark so to speak. But ultimately what's changed? The impatient pay more or get less, maybe it's a good way to price discriminate. They aren't likely to leave for another market over it since they aren't too price sensitive anyway.

We waste a lot of our time. Much quicker to be able to just see what's on offer and if it fits your needs you buy/sell.

Raulo
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January 09, 2011, 08:52:51 AM
 #16

Completely dark pools, like mtGox, ones is not a good idea. I've never seen anything like that in any real market. However, partial hiding of the size of the order is done and should be rather beneficial for both the market and for the large order owners.

Suppose the minimum shown order size is 1000 BTC. If you want to sell, say 100000 BTC, you can mark only 1000 BTC visible (and 99000 hidden). If someone buys 1000 BTC, the order gets filled and another 1000 BTC on the ask side is shown (and the hidden part is now 98000). If someone buys 2000 BTC, 1000 BTC is sold from the ask part, then another 1000 BTC is immediately fulfilled by another part of the hidden pool and another 1000 BTC is shown (and 96000 hidden). If someone buys 100 BTC, 900 is left on the visible order. The hidden pool will be moved to the visible order only after the visible order is gone.

This way, you can hide some of the volume and not "scare" the market and the potential buyers can see that there is some order and can buy it and not act completely in the dark.
  


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January 09, 2011, 10:22:48 AM
 #17

just to clarify one thing and secondly comment on dark pools

1) my relationship to mtgox and all the other exchanges is the same as for everyone else.
I dont see any completely dark pool order.

2) overall, it does not make any difference to the market no matter if you have dark pools , semidark pools or none.
there are already enough traders and professional-enough investors participating in the BTC market who know what's going in the market.
they can " test the water" and find out if there is resistance via a dark sell order
or support by a dark buy order or not.
in the end it does not matter.

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Binford 6100
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February 23, 2011, 10:06:16 AM
 #18

I don't understand what the benefit of a dark pool is. Can you explain why someone would use the dark pool? Or why someone wouldn't use the normal pool and should only use the dark pool?

elsewhere in this forum is written that without dark pools the exchange rate of btc would be .10 cent

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February 23, 2011, 02:35:53 PM
 #19

Do they back those claims?

(I dont always get new reply notifications, pls send a pm when you think it has happened)

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February 23, 2011, 07:07:20 PM
 #20

Do they back those claims?

i had the impression it was half jokingly, half truth

i can imagine that bulk trades between "founding members" and exchangers happens at serious discount
and are hidden from broadcasted exchange data with good looking exchange rates. but i can't proove it

You can't build a reputation on what you are going to do.
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