TD Ameritrade Holding Corp. (NYSE:AMTD): More Harm Can Be Caused By Dark Markets Than Trading In High Frequency

Donna Fago - April 7, 2014

Boston, MA 04/07/2014 (wallstreetpr) – Element Of Damage Could Be Seen By Dark Markets Than High Frequency Trading

The fears of TD Ameritrade Holding Corp. (NYSE:AMTD) that trading in high – speed has been rigging the stock markets of the US became conformist last week. This happened due to the allegations written in a book by a finance author Michael Lewis. However, there can appear a more intense to the shareholders, which is the growing number in the trading that takes place outside of the exchanges. As a result of this the company is no longer able to properly exhibit their position in the stock market. This trouble may cause the investors a lot more money than trading in high frequency.

Problems due to trading outside of the exchange

Due to this problem, when a prominent portfolio manager or a regular capitalist, attempts to deal with a share the trade rarely is matched with another dealing by an investor in a “dark-pool” or another possible alternative to stock exchange. Because of such a scenario, investors with huge amount of orders can nowadays more easily cover what are done, limiting the scope of being exposed. The critics of this system say that this type of dealing outside the exchange is dangerous since it reduces the transparency in price.

Trade secret of Stock Market

A primary concern regarding off-exchange dealing is, who are internalizing trades and offering dark pool, do not give any record to the exchange before any deal is executed. On the contrary, in a stock exchange after the arrival of an order, the price range of that stock is altered and everyone having access to data fees can see it. Regulators based in Australia and Canada has taken measures to restrict the growth of blind trading. Authorities of Hong Kong and Europe are also working on decreasing the numbers of off exchange dealing.

Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at recently due to my passion for the markets.

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