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romacopia t1_iuik49w wrote

Reply to comment by stuckindayz in Even an Inside Trader Would Have Problems in This Market by KingN0

I realize this is an old conversation and I should probably just leave it, but I want to set it straight.

When an institution internalizes your order, it is functionally identical to them inversing your position as far as their books are concerned. It is true that they don't bring your order to market, but they also don't bring their own inversion. They also do this at your discretion, not theirs. They gain the option to bring your order to market at their discretion which, again, is functionally identical to closing out the inverse of your position. You also have the right to send an order to close your position at your discretion which the institution also internalizes, effectively closing their inverse position on their books - but not the open market.

If they brought these exact trades to market together instead, it would only increase volatility, not move the market directionally. All they really gain by doing this is eliminating the risk of slippage when making large trades, plus whatever fees and commissions they collect. They still realize the P/L of the spread between when you open your position and either when they close their internal inverse position or when you close your position. When they choose to bring your order to market, yes, the market moves, but they also must still realize a loss if they are in the red. If they bring your order to market to (effectively) close their internal position while yours is still open with them, the market moves against you AND them, because they're now in an identical position to you in the open market until you close out and they bring your closing order to market.

Internalization doesn't give them the ability to manipulate the market in their favor. What they gain is the elimination of slippage. You can also benefit from this through reduced volatility on the open market. You can trade with narrower stops and profit targets.

Also, I don't care about the internet bandwagon. I personally think the dialogue around GME is eerily similar to online conspiracy groups and it creeps me tf out. Also I think the whole thing is a giant FOMO and the squeeze squoze a long time ago. You do you, though.

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stuckindayz t1_iujlcwe wrote

Anti Evil reddit deleted this on me... StupiD words.
" It is true that they don't bring your order to market, but they also don't bring their own inversion. They also do this at your discretion, not theirs."
No they don't, they use the inversion of someone else's trade that hasn't settled yet either buy or sell. They own both sides of a full trade internalized.
"When they choose to bring your order to market, yes, the market moves, but they also must still realize a loss if they are in the red. "Losing a current trade in this market is akin to losing a single soldier in the battle. It's irrelevant as it's volume that is important. Every purchase and sell by an individual internalized is an up and down movement they can further utilize. All this done by algos. They'll on purpose lose thousands of trades to WIN a hedge/derivative betting against those trades they used. The individual trades are pawns. Again all ago's. all attached.
"Internalization doesn't give them the ability to manipulate the market in their favor. What they gain is the elimination of slippage. You can also benefit from this through reduced volatility on the open market. You can trade with narrower stops and profit targets."Yes although true for eliminating slippage, you forget that internalizing is not JUST a buy or JUST a sell, it's the entire transaction. each has it's own "period" of time before it's required to be sent to an external market, if it's not just wiped internally.
I could buy a 100 block share of Tesla, and 37 days later I sell. there's still 53 days left to actually buy *potentially longer* the actual block, or just nullify it. So on day 85 it uses your 100 share block purchase for its own purpose to move the stock, and then uses your sell order on day 88 to make a profit on the move.
"Also, I don't care about the internet bandwagon. I personally think the dialogue around GME is eerily similar to online conspiracy groups and it creeps me tf out. Also I think the whole thing is a giant FOMO and the squeeze squoze a long time ago. You do you, though."
No it's eerily similar to Tesla. These people aren't Conspiracy regards they're bandwagon investors. This is Tesla 2.0 regarding GME, i know it's brick n mortar I know its NFT Jpegs but the CULT is the exact same as TSLA in 2012-2018 era and I'll ride ANY financial cult cause those morons refuse to sell which even WARREN BUFFET famously states all short sellers are just future buyers, so they just cultishly out wait anyone betting against people willing to worship a south american (sl()ave) < they deleted my comment cause of that word... mine owners kid. It's fuckin dumb on both sides but im here for money.

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stuckindayz t1_iujmrbw wrote

>Ya don't worry about this, I'm up for discussion about this as deep as you need to go. It's critical we start to understand the stock market is not what it was supposed to be, or agreed to midway, and the end stages are just superman3/office space skimming and manipulation combinations that are decimating the retail investor

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