Dark Pool Trading

Dark Pool Trading


Dark Pool Trading With BlackBoxStocks

We recently caught up with Melstone, BlackBox’s very own dark pool trading queen, and here’s a brief overview of what she had to say about dark pool trading…

It’s such an honor to be with the BlackBox team. I have been trading full time now for two and a half years.  I was quickly drawn towards understanding the bigger market participants, and discovered dark pools as well as unusual options activity.  Black Box Stocks has all the data I need to follow alongside the institutional money flow and today I’m so excited to share the data that BlackBox offers you, it has changed the way I trade.

My strategy is to follow the money, and by following the money I’m following options flow and the dark pool. The “dark pool,” it sounds so ominous, what is it? Dark pool transactions are what the institutions are doing in order to fill large trades, they go to the dark pool exchange, but you know what?  You and I can’t trade on the dark pool! That is limited and private transactions for the institutional money. They buy and sell using dark pool trading because they can find larger fills and they can also get those cheaper.

So, by following the dark pool, I found that there’s a real opportunity to truly follow the money. When you mix dark pools with what the options flow shows you, well it’s just my perfect options trading strategy. So, with BlackBox we get to see real time options flow and dark pool data that is streamed live to the millisecond.  Being able to simultaneously follow the money using live streaming dark pool as well as the options flow data gives me an advantage in trading.

BlackBox also provides the ability to apply filters so that we can customize our view. I personally filter mine to just show dark pool. You can also filter yours to show 52-week highs and lows, price spikes, halts and low floats, there are so many choices, but I keep my eyes on the dark pool. I’m looking for unusual volume that may be coming through.  Because, as traders, what do you want? We want and need volume to come into our trades! We need to see that there’s some activity that comes through and I like to know what is happening with the dark pool trading and where the big money is setting up.  Either in the options market or the dark pool.


Dark Pool Trading Strategies

Let’s talk about dark pool trading.  With the dark pool, you don’t know the intent. You don’t know whether it’s a buy or if it’s a sell. That’s the objective of why they trade in the dark pool. They are either trying to get into a position or to get out of a position without showing intention. So, by combining the options flow with what you’re seeing in the dark pool feed, you can start to put pieces of the puzzle together. You’re looking at your charts, you’re looking at support and resistance, you know that there has been some interest coming through the dark pool.  You’re now seeing that there’s some directional options flow coming through the options feed. This is all starting to build a picture for you, as a trader, to where you can actually follow the money.

This is how BlackBoxStocks provides a huge advantage to us traders!  Folks trading in the dark pool are people that know what they’re doing, and with BlackBoxStocks we can peek behind the curtain and follow along. Institutional traders are leaving a trail, they’re leaving pieces of the puzzle behind. As traders, it’s our job to put it all together.

Also, I wanted to talk about some of the unique features of BlackBox because we actually keep these dark pool data feeds running until the official market closes.  Some people think that it all just stops when the bell rings, at 4 p.m. eastern time, but that’s not the case. They can continue to record transactions up until 8:00 p.m. eastern time. You’re probably not seeing this information. Everybody’s left for the day, high frequency traders are done, everybody’s stepped away from their computers, but there is still so much post market trading and this is the part that I like to watch.  We’re seeing it in real time, we’re seeing it live here at BlackBox.


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