In the wiki page of this "shady" Ackman guy ( https://en.wikipedia.org/wiki/Bill_Ackman ), the following sentence is written: I wonder how such a direct sale by bypassing the stock exchange is possible. Where is this procedure described/regulated? Anybody here with experience with such direct sales between two parties?
answer: DARK POOL ..yes they are legal and regulated. These types of private transactions happen practically everyday. Example: Bloomberg Tradebook and Goldman Sach's Sigma X2 are well known dark pools. https://www.investopedia.com/terms/d/dark-pool.asp
Right, I too have thought about this, but then also thought that then most big trades would happen outside the normal stock exchange as the parties can make fixed-price deals which does not impact the official stock price... But is this then ok? [of course ok for the two, but if the same trade business would happen in the regular stock market then it would impact the stock price to a high degree... So, something doesn't look right, IMHO.]
'Bypassing stock exchange' is maybe not the right expression to use. All trades for listed stocks need to be printed/reported on a stock exchange. It's means that the shares are not exposed in the order book before being filled. The trades are done off the exchange, and once done, are reported to exchange. They also cannot be done at any price.
“Why are U.S. exchange-listed stocks also traded over-the-counter? When an institutional investor is making a large trade (think thousands of shares), they sometimes prefer to do so over the counter, perhaps through a dark pool, for the pre-trade anonymity — and potentially price stability — such venue can provide.” https://www.finra.org/investors/insights/unraveling-mystery-over-counter-trading Institutions can enter into a sort of a swap agreement with Prime Brokers to accumulate or distribute large amounts of stocks without being detected via 13F filings. There also services like below: https://www.refinitiv.com/content/d...autex-ioi-trade-advertisements-fact-sheet.pdf
Usually block trades must be done between the market (bid-ask) at the time they are printed/reported. There are exceptions (of course!) and those trades must be flagged as 'As-Of' or 'Late'. But again, these cannot be printed at any price. The SEC is looking at this very closely. The most important thing for us (retail traders) is that these trades don't 'directly' impact the market because the deals are done 'outside' the regular stock exchange market conditions.
There are educators that claim that they can trade off dark pool transactions. I don’t understand how they can make a directional bet based on that.
There are tons of ways for big guys to bypass exchange. One way is through equity swaps which are OTC Exchanges do not help the little guy anyway they are usually bloodsuckers.