Well, bing bong dong shlong. I was wrong, there's no other way. To put this guys, i got to make a clarification video a couple days back about two days ago, i put out a video about how the market takes advantage of retail and i titled it. The shadow market right and everything about what i talk about in this video is pretty nail on the head outside of one uh small problem right: terminology vocabulary: this is something that seems like uh.

It shouldn't be a big deal, but titling uh dark pools. As the reason behind what's going wrong within stocks, like amc like gamestop, like many of the the ape stocks right, that's just flat out incorrect, because what i'm about to talk about guys is how these are different and how i got brought to that conclusion. In the first place, so, first and foremost, i do have to apologize right, it's uh, it's a responsibility that is on my shoulders that i i really should uh not get things wrong right, and i want to show you why i believed what i did so check. This out, this is an article talking about amc's, dark pool trading volume.

It reports - and this is just one one example - uh volume coming from amc from off exchange platforms right - and this is an important thing to note - is off exchange because that's how dark pool gets labeled as the reason behind dark pool trading uh that you see right, But in fact, it's really not dark pools that are accounting for this large number. In fact, the majority of dark pool volume on amc is pretty low compared to what i'm about to talk about which is otc now. What is otc right? Why is this important? Because it's the other side of the coin of uh off exchange trading, if you have two two, you know besides i'm about to say two heads, i don't know why you got two sides to the coin right. One of these is going to be ats.

Alternative trading systems just like we talked about right here. These are meant for institutions to have large transactions filled without any sort of uh transparency, and so you don't move a market at the same exact time, and then you have this otc otc stands for over-the-counter. You can think of these as the exact same coin right otc could be heads, ats could be tails and, in this instance, labeling ats, alternative trading systems or dark pools as the reason behind a lot of the issues that you see within, like i said, different stocks In the market is just wrong, it's the wrong term, but it does talk about the right concepts in the previous video. You do have a buyer seller going to a broker going to a market maker, we're using citadel virtue as examples, because i do believe they are duopoly within the market.

You know the market making scene who they have a decision to make, and this decision, my friends, it's almost worse, in fact i would argue it is worse that it is done this way instead of via a dark pool, because it shows an incredible conflict of interest. So, let's start off here you got a buyer buyer over here decides they want to buy 100 shares of x stock, they go to a broker and the broker uh just says you know what that sounds. Good we're gon na have this transaction filled and they send it to a market maker. Robinhood sends us over to sit it up.

For example, right now, you've got vladimir the boy from bulgaria and he says all right. Kenny g give me a rate. Give me a good rate. I don't want to have a huge spread between the bit in the ass.

Don't rail me too hard and the market maker over here has a decision to make kg says. Should i go over to load, exchange right and pay the market value, which is currently ten dollars in one cent, or should i do this otc over the counter now? Why is this important right? Look at the spread difference here: 101, phil or 10 phil. Well, kenny g over here and his uh, his group over at citadel, are going to choose the discount price because they're getting the same transaction order from uh the buyer. Over here.

Let's say they decided to buy it at oh market value - 10, 01., but they see it over here at 10, right 10, because this is what you see you see the lid exchange. You see lit exchange at 101. You say i want to buy this stock. They have it in their own reservoir.

Think of that as otc internalized transactions. So let's say that, a day prior, two days prior citadel in anticipation of a major amount of buying pressure when another way to buy stock from the lid exchange or from a dark pool, they could do that either way. This is uh sort of two ways to think about it, but think primarily about lid exchange. They have a portfolio of stock in whatever they decide, they're gon na own, a portfolio of stocking and this otc internalization of the transaction means they're pulling from their reservoir.

This is literally freaking held by citadel. This is citadel's own holdings in a stock and they go okay. I bought this at ten dollars yesterday, uh they wanted it for 1001., we'll send them we'll send it to them for 1001 and we just paid 10 bucks. We made some money right bam goes out, but this is the problem.

They have an obligation to get the national best bid offered. Meaning gets you the best price possible for the stock that you are trying to buy and if they're not doing that right, you get a conflict of interest here where they bought it at ten dollars literally the day before, maybe an hour before, maybe a minute before. Instead of at the lit exchange - and they don't give you that price improvement - that's problematic right, that's not in the best interest of retail investors. That's that's hugely problematic virtue right.

They can do the exact same thing, otc internalize their orders and they say yeah. Why would i why don't i go to the exchange? Buy the stock at 10? 10 001. I've got it in my portfolio with 10. I made a cent hooray, you know, send it on its way boom.

Just like that, every other market maker. What choice do they have you? Don't leave them any choice now get this. I made an example, my previous video, and this is actually an even better example and an even better way to illustrate sort of what takes place here so check this out. Bread lover you've got uh this guy.

He says i just love me a good pastrami. I need some bread for my sandwich and he uh. He goes to a distributor and distributor, says too easy, but they actually don't have bread right. Now.

Some distributor does this. They go to a bakery this bakery. They tell the bakery, hey man. Look this guy wants a pastrami.

He wants a nice loaf of bread. What can you do for me and he says all right: i've got two choices, actually, probably three choices. I can go to the less transparent, which you can think of as dark pools. Lower quality ingredients buy it for three dollars uh.

Typically, this is meant for uh bulk institutions. I don't really want to do that right. What's the point of buying such a large amount of ingredients for such a small customer, i know i could go with exchange. I could go just get some higher quality ingredients.

Ten dollars just buy from the same market that everybody else probably is able to see, but how about this? Instead, i have my own reservoir ingredients. I can internally execute this transaction, because i've actually already bought all these ingredients and it might be a little old. They might be paying more than uh, they think they should more than they should be, but who cares i'm making money so it i've got my own ingredients. I've got my own reservoir.

Let's send those ingredients out here and on their way, so they do their reservoir of ingredients. Their otc, their internalized transaction takes place, goes back to the distributor distributor makes their bread. Bread lover, gets their bread. The problem here is these: two people at the bottom are getting they're getting they're, getting shoved right up their freaking, anal, cavity and uh.

They can't do anything about it, because the bakery is not transparent about these things, just like citadel and just like virtue. So, where am i going with this video right? I can understand entirely why this uh buddy? What are you doing up here? This is titan guys be my cat. You gon na bite me no. No.

The problem with this is is right here, for you right check. This out, if you look at this sec document the gamestop report, they talk about uh, they talk about dark pools in it. They discuss dark pools, but wholesalers, which you can think of as otc internalization of an order, is the real problem here and you can see it right. Look back in january, you see that 50 of uh volume rising as high as 55 daily internalized dollar volume twice came from citadel right.

High wholesaler volume virtue same thing, high amount of wholesaler volume back in january; they discuss it, but this is a confusing concept. It's a very confusing concept where there's purposeful and necessary unnecessary complexity tied into the situation. So people like you and me, don't understand it, and if we want to be taken seriously, an important thing for us to do is to write use the right terminology. Apes have been right about all the problems, the conflict of interest, the not getting the the best execution from people like cereal and people, like virtue you're right about all of it.

All those things are very valid. We just have to use the right terminology right. I see things like dark pool abuse and i recognize right and i got on the train and this video is called. I was wrong.

I got on the train and i talked about dark pool abuse on my twitter on my youtube, but when you get new information, i've said this before and i really do mean it. You have to be open to the idea of changing your mindset on something. This isn't a this, isn't a large shift, it's a small shift. This is using the same concept and giving it a new name.

This new name, my friends, is called otc otc, my friends over the counter. Not for me otc is not for me right. It's problematic. It's got conflict of interest.

It's it's very obvious, probably way more obvious now than uh, perhaps even with dark pools. It doesn't matter, it's catching a name right, dark pools, sound like uh, something coming straight from a villain in batman right but uh. That is what it is, it's just what it's called we have to. We have to use the right terminology and i would be the first to come out and say i was wrong right and we have to be better about these things, because if you got somebody like the sec, you've got somebody like big big players, who are maybe Sitting on the sidelines and want to get in and give their two cents about what's happening here with retail investors in the apes they're gon na look at this dark pool thing because they might know exactly what it is they're gon na say these guys couldn't even Do their homework enough to understand the difference, and i get it right it's confusing stuff, but as we learn as we grow, we share that knowledge with each other.

We keep it freaking real and we continue to move forward. That's ultimately what we can do right, so that is the video that is the big thing here when you picture dark blue abuse picture otc picture your order being internalized and filled by a market maker in their own portfolio. Now i am keeping this simplified or this is a simplified process, but these are the most important things to note. Hopefully you guys pulled some value from that i'll catch.

You guys on the next one as always much love light taps and peace.