isn't it logical though that the power company would buy power for less than it sells? and paying the same rate that it buys from larger producers seems fair.
The principle is fair, but the specific price can be unfair. Especially if the home as provider could be supplying into spot or other markets. Thats where a neighborhood or coty consortium/ cooperative of community users could make sense to maintain a better pricing deal from the utility.
1. They also won't allow battery storage while connected to the grid. If they wanted to buy surplus but allowed my to store my own production, I would be fine with it.
2. They also net bill daily. So while I may produce extra within the billing cycle, they zero out excess production daily.
We always have blocks of hard cheese and cheddars in the fridge and I feel fine cutting off any moldy bits. With the shredded stuff, I'll forget about it and we end up binning lots since its impossible to tease out the bad from the good.
In the case of Dark Pools, it would actually be the crier saying "a lot 10x the size of what I'm auctioning just traded somewhere else where none of you lot can trade for xx price". So after they say that you actually do know the price that they bought the item(s). This is since the dark pools have requirements to report to the trade tapes their trades in fairly similar latency to the exchanges themselves.
EDIT: The rules also dictate the allowed prices the dark pools trade at. They have to be within the national BBO, they can't just trade at whatever price they want. So the public auction is actually helping them find the prices, without their pre-trade information affecting the price before execution.
If you look up RegNMS the goal is to make public markets fair by having rules that have to be met in order to trade. Dark pools allow participants to 'hide' information that's not public. It is mostly about the order books. If dark pool sell order for 1B of TSLA stock goes on the order book, only other members of the pool get that information. The dark pools are required to still follow RegNMS rules for trade prices, but there is an inherent asymmetry in the market information in this case as the dark pool participants can see the public markets and their dark pool in order to make trading decisions.
In your neighbor's house example, it would be like if there was a street market auction for trading cards happening in your neighbor's front yard, but in the house your neighbor and another neighbor had gotten together to trade 100x the average #of cards using the prices they hear from outside, and the people outside only see the deal they made after it's done.
And what would the problem be with that example? It seems everyone has agreed on a fair price and is trading on it. There isn't any incentive for the private traders to trade at a different price or one of them is getting ripped off due to the arbitrage potential. And they don't believe that publicising the trade would move the price or - again - one of them would have an incentive to do so because it'd move in their favour.
I don't see how I'd be disadvantaged as any actor in that scene.
You are disadvantaged as an outsider because you don't know who is buying or selling and how much they are trading. You don't know the demand levels at various price points. If, for example, you want to buy Stock A which is currently trading for $5 and sell it for $6, but there is someone trying to sell 5 million shares for $5.05 but you can't see that you can't make an informed decision on ideal price points for your trade.
Although the above example was missing some details, I suspected it was meant to illustrate the following effect:
The public last price was $5, so bid/ask will be around that price let's say 4.99/5.01, if you buy with a market order you'd pay approximately $5 ($5.01).
But if there is a new large sell order for 5 million shares at 5.05, then the market would react to this information and adjust bids & asks.
For illustrative purposes it could be possible (if the 5 million order is rather large in comparison), that the new bid/ask would be 4.89/4.91 and you'd get your shares for around $4.9.
That is irrational. It suggests every time someone sees a market price at $5 they could put in an enormous fake sell order for shares at $5.05 to buy shares at $4.90 then cancel the fake order, which makes no sense. "The market" is giving away freebies in an insane way.
If the clearing price is $5 and someone puts in a huge sell order for $5.05 there is no reason for the clearing price to drop.
>If the clearing price is $5 and someone puts in a huge sell order for $5.05 there is no reason for the clearing price to drop.
Except that the market is all game theory. If someone who bought a million shares with an ideal exit of $5.10 sees 5 million shares for sell at $5.05 it can absolutely inspire them to sell cheaper because the idea is predicting directional movements.
I design some financial software and the best way to think about it is to abstract away the idea of money and numbers. Think of it as a maze and every stock and price point combination is a doorway.
Normally a door, when you open it, you can see down the hallway to how long the next door is without actually entering the hallway. (In the stock market this is called Level II data) the impact of dark pools is that when you open a door you can't see how long it is. Except that it looks like every other hallway with a defined length, but you don't know that it is a hallway that keeps going for an undetermined amount of time. There's no way to figure out the length without entering the hallway and going as far as you can until you either reach the end or become exhausted (Not a great way to solve a maze).
Without access to the dark pool the best you can do is enter the hallway and figure out it doesn't behave as expected and move away from it.
It's a significant advantage when you are playing against other people to see the complete picture of the maze at any given time. There are entire teams of PhDs working to decode the positions of dark pools they don't have access to by analyzing option data.
> If someone who bought a million shares with an ideal exit of $5.10 sees 5 million shares for sell at $5.05 it can absolutely inspire them to sell cheaper because the idea is predicting directional movements.
Your basic argument there seems is "new information can cause the price to move at random". And I accept that. But it doesn't matter to anyone on the lit market because the trades on the dark market would help or hinder them at random if they were publicised. If there isn't a systemic bias then it is just noise, I have a choice between the price on the lit market or ... the price on the lit market plus some random variable that might be positive or negative. It doesn't change how much money I expect to make. I'm not at any sort of disadvantage.
It doesn't change my ability to value my trades and it doesn't cause me to think I'm going to be better or worse off. We already know that distinct market participants have different knowledge and world models. There isn't anything here that it is useful to adjust.
> Think of it as a maze and every stock and price point combination is a doorway.
This explanation literally makes no sense to me; I don't see how it matters. Someone offers to buy at $X/sell at $Y. Someone else chooses to take the other side of the trade or not. It is only that weirdly complex if you want it to be.
If you need omniscient knowledge of the market structure to value a good then it isn't possible to trade it because your knowledge is always lacking information that is relevant to valuations. For example, you can't know about orders that are about to be lodged in the immediate future. We all have to operate with the understanding that some other market participants know things we don't and value things differently. It doesn't make the trading environment unfair.
You seem to have a traders perspective here where you want to turn a turn an asymmetry of nearly irrelevant information into profit. I'm cool with that, but I don't care if it works or not. It sounds like a zero-sum game, someone is going to lose. and I don't see why I should be phased about who or why. I just want the market to offer to buy/sell things at a fair price. Dark pools don't seem to influence that in any way, the incentives mean that the price signalling should be basically honest.
Why would volume outside of the NBBO force price down? I think you are also over weighting order book impact to price. There is definitely some information there but with its not always that meaningful.
Because you want to move ahead of the 5.05 seller and be sure your shares can sell for $4.90. If the $5.05 seller is trying to sell 5 million, but it's taking a long time. They might drop down to $4.85 or something. It's all game theory and predicting what others will do. A big part of that is having all of the information.
You are not disadvantaged because you are not buying 5mm shares. I like to think of it closer to volume pricing rather secret pricing. You could definitely do retail level volume on a pool but you will be paying for it and that cost will generally be higher than any "savings" you may get in price.
Its similar to complaining that someone is buying eggs at wholesales prices while you are paying retail.
Its more like 50% of total volume being traded in dark pools. Your price argument does not make much sense though, the beauty of western markets is that folks are so opportunistic that someone will exploit any information asymmetry so your argument would not hold up. Also at the end of the day its not like buyers and sellers in a dark pool know "the price" of what they are trading, sure they have ideas of where they might be buyers and sellers but they are still using the lit market data to inform their decision.
but people trading inside the house would know this already. If they suspect that the fair price is being manipulated, why would they continue to buy inside the house?
> If you look up RegNMS the goal is to make public markets fair by having rules that have to be met in order to trade
That was the goal and it failed at it in everything but the most technical sense. Why two people coming to a handshake deal about the price of their property is illegal is insane. I previously bought the argument about propensity for fraud. But if we’re normalising crypto, there is zero need to continue treating stock like it’s radioactive.
> In your neighbor's house example, it would be like if there was a street market auction for trading cards happening in your neighbor's front yard, but in the house your neighbor and another neighbor had gotten together to trade 100x the average #of cards using the prices they hear from outside, and the people outside only see the deal they made after it's done.
Isn't that how everything is traded? Am I supposed to be outraged that everything I buy retail also exists in a wholesale market?
For these institutional traders, the pools offer them opportunities to trade with a small set of counter parties that also have deep deep liquidity, so in a sense it is kind of like the wholesale markets for retail. Orders hit the book in the pool and they don't have to worry about 'current retail' stock and can trade massive blocks with trade certainty.
>Dark pools allow participants to 'hide' information that's not public. It is mostly about the order books. If dark pool sell order for 1B of TSLA stock goes on the order book, only other members of the pool get that information. The dark pools are required to still follow RegNMS rules for trade prices, but there is an inherent asymmetry in the market information in this case as the dark pool participants can see the public markets and their dark pool in order to make trading decisions.
But traders can easily hide the size of their "true" order by breaking it up into chunks and constantly refilling the order if it's taken? This is basically trading 101. If you want to do a big selloff, you're not going to dump all of that in one order.
But by breaking up the order they have to wait and the market can move in reaction to their sell off unless they do it very slowly. Dark pools can completely hide a large sell or buy order from the market long enough to execute at the current strike if there's another member in the pool buying. They wouldn't use it if it didn't give them an advantage because it costs more than regular trades.
>But by breaking up the order they have to wait and the market can move in reaction to their sell off unless they do it very slowly
it kinda works out because the other side is also smart and will also break up their orders. Putting in a massive buy order is a good way to pay through the nose.
>In your neighbor's house example, it would be like if there was a street market auction for trading cards happening in your neighbor's front yard, but in the house your neighbor and another neighbor had gotten together to trade 100x the average #of cards using the prices they hear from outside, and the people outside only see the deal they made after it's done.
I mean, that's literally what happens with trading cards. It's super common to base face-to-face deals (whether for cash or trades) on internet pricing, including very big ones. (the trading card market is a lot less liquid, though, so it's also common for there to be a fairly big discount or premium on those prices in the deal for various reasons)
we're trying to cut back to only Disney+ for kids and we use prime video for us. Amazon's genius "take this prime video credit for slow shipping" has us renting movies maybe once a week and it's much better value for us than all subscriptions services that get no playtime.
I don't see why a re-design like this wouldn't have included both pedestrian and car infrastructure improvements. Tighten all the turn radii, add bump-outs to each corner, and you could have a signalized intersection that is better than it was before for both.
Having also worked on desks in the 00s and early 10s I think a big difference here is what trading meant really changed; much of what traders did went away with innovations in speed. Speed and algos became the way to trade neither of which humans can do. While SWE became significantly more important on trading desks, you still have researchers, quants, portfolio analysts, etc. that spend their working days developing new algos, new market opportunities, ways to minimize TCOS, etc.
That being said, there's also a massive low hanging fruit in dev work that we'll automate away, and I feel like that's coming sooner rather than later, yes even though we've been saying that for decades. However, I bet that the incumbents (Senior SWE) have a bit longer of a runway and potentially their economic rent increases as they're able to be more efficient, and companies need not hire as many humans as they needed before. Will be an interesting go these next few decades.
> That being said, there's also a massive low hanging fruit in dev work that we'll automate away
And this has been solve for years already with existing tooling. Debuggers, Intellisense, Linters, Snippets and other code generations tools, build systems, Framework Specific tooling.... There's a lot of tools for writing and maintaining code. The only thing left was always the understanding of the system that solves the problem and knowledge of the tools to build it. And I don't believe we can automate this away. Using LLMs is like riding a drugged donkey instead of a motorbike. It can only work for very short distances or the thrill.
In any long lived project, most modifications are only a few lines of codes. The most valuable thing is the knowledge of where and how to edit. Not the ability to write 400 lines of code in 5 seconds.
"And now, at the end of 2024, I’m finally seeing incredible results in the field, things that looked like sci-fi a few years ago are now possible: Claude AI is my reasoning / editor / coding partner lately. I’m able to accomplish a lot more than I was able to do in the past. I often do more work because of AI, but I do better work."
"AI didn’t replace me, AI accelerated me or improved me with feedback about my work"
This really sums up how I feel about AI at the moment. It's like having a partner who has broad knowledge about anything that you can ask any stupid questions to. If you don't want to do a small boring task you can hand it off to them. It lets you focus on the important stuff, not "whats the option in this library called to do this thing that I can describe but don't know the exact name for?".
If you aren't taking advantage of that, then yes, you are probably going to be replaced. It's like when version control became popular in the 00s, where some people and companies still held out in their old way of doing things, copying and pasting folders or whatever other nasty workflows the had, because $reasons... where the only real reason was that they didn't want to adapt to the new paradigm.
This actually surfaces a much more likely scenario: That it's not our jobs that are automated, but a designed-from-scratch automated sw/eng job that just replaces our jobs because it's faster and better. It's quite possible all our thinking is just required because we can only write one prototype at a time. If you could generate 10 attempts / day, until you have a stakeholder say "good enough", you wouldn't need much in the way of requirements, testing, thinking, design, etc.
But like so much of this thread “we can do this already without AI, if we wanted”
Want to try 5/10 different approaches a day? Fine - get your best stakeholders and your best devs and lock them in a room on the top floor and throw in pizza every so often.
Projects take a long time because we allow them to. (NB this is not same as setting tight deadlines, this is having a preponderance of force on the side of our side
