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A comment on Darker Than a Dark Pool? Welcome to Wall Street's 'Private Rooms'. Parent comment

Re:Darker Than a Dark Pool? Welcome to Wall Street's 'Privat... by gruez on Monday March 17, 2025 @07:59PM (#43394148)
>I suspect that this is the absolute core of "dark pool" strategy. Any trade that happens behind closed doors that "doesn't impact prices" means that an index fund is buying or selling at a price other than the "real" price meaning that dark pools are functionally a wealth transfer from grandma to an institutional trader.

Is there evidence for this, or this all baseless speculation?

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Re:Darker Than a Dark Pool? Welcome to Wall Street's 'Privat... by derf_ on Tuesday March 18, 2025 @12:09AM (#43395673)
These kinds of wealth transfers have been studied, and you do not need dark pools for them, just predictable trading patterns. See, e.g., https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5080459 on index funds or https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5122748 on funds that maintain a certain ratio of stocks to bonds (e.g., target-date funds). These costs can be larger than the actual management fees of the funds.
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Re:Darker Than a Dark Pool? Welcome to Wall Street's 'Privat... by Dylan16807 on Tuesday March 18, 2025 @01:47AM (#43396130)
The evidence being asked for is that dark pools and rooms will increase this effect.
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Re:Darker Than a Dark Pool? Welcome to Wall Street's 'Privat... by jart on Tuesday March 18, 2025 @12:22AM (#43395725)
It sounds like they didn't read the article. Grandma's money is in a large centralized retirement fund whose managers trade via dark pools, specifically so she won't be grafted by AI traders every time they need to adjust its holdings.
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