Are You Being Gamed?

摘要

Even as buy-side traders continue to send more and more order flow to dark pools as a way to avoid information leakage and moving the market, concerns about price manipulation, or gaming, in the opaque crossing networks are on the rise. While six months ago the main issue for buy-side institutions was navigating the fragmented markets - which comprise more than 40 crossing networks, block trading systems and dark liquidity pools - the hot topic now is protecting against gamers. A gamer, or predator, pings a dark pool with a small sell order to dis- cover if there is significant volume on the opposite side of the trade. He or she then exploits that information to push up the price of the stock in the public markets. A gamer might place a 100-share sell order for an illiquid stock.