The Dark Pool – A Market Anomaly to Make You Rich

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If you’re a member of one of my investing services or a regular MoneyWire reader, you know that I go after big profits over the long term.

I dig deep for the best companies driving and benefiting from unstoppable hypergrowth trends taking us into the future, and then I stay with them unless the reason we invested to begin with changes. (I just talked about this strategy in more detail a few days ago.)

Investing for the long term has made a lot of people a lot of money – my own subscribers included. But that doesn’t mean there isn’t a place in the investment world for short-term traders.

My friend Stefanie Kammerman is the perfect example of this. She’s built her fortune on trading what are called the “Dark Pools” – private stock exchanges where the big boys on Wall Street place their trades.

Today, she’s taking over MoneyWire to explain her strategy in more detail… and to show you how to build wealth using the power of the Dark Pools. It’s a fascinating story you won’t want to miss.

Best regards,

Matt McCall
Editor, MoneyWire

The Dark Pool – A Market Anomaly to Make You Rich

This is a one-year chart of Boeing Co.’s (BA) stock price…

As you can see, the big airplane manufacturer’s stock bobbed up and down during the year… in a manner some people describe as a “random walk.”

To almost everyone, short-term stock market moves like you see above are just “noise” – unexplainable, unpredictable moves we should ignore while focusing on the long term.

You see, we all know what makes stocks move over the long term. That’s revenue and earnings. The more money a company takes in and turns into profits, the more it will be worth over the long term.

But most people have no idea what causes a stock to move over the short term.

Most people have no idea what causes a stock to increase 10% over a few days… or what causes a stock to decrease 6% over a few hours.

So, almost everyone says the market’s short-term ups and downs are meaningless.

“Good!” I say.

That means more money for you and me.

I’ve been trading the stock market full time for more than 25 years. And I can tell you that there are fortunes to be made from the short-term “noise” you see on stock charts like the one above.

In fact, one of Wall Street’s best-kept secrets is how you can make hundreds of thousands – even millions – of dollars a year trading the market’s short-term ebbs and flows.

While most investors look at charts and see meaningless, unpredictable squiggles on a chart, I see opportunities to rake in millions of dollars in profit for myself and members of Dark Pool Trader – our “trading club.”

You see, there’s an order to the stock market’s short-term ups and downs.

Where most people see random noise, I see this order at work… moving stocks up and down in a way we can regularly profit from.

This is thanks to a hidden stock market phenomenon called “Dark Pools.”

Let me show you what I mean…

Dark Pools are private stock exchanges where the “big boys” on Wall Street place their trades. They’ve existed for decades.

Regular investors buy stocks on public exchanges like the Nasdaq and the New York Stock Exchange. But big Wall Street institutions like Goldman Sachs and J.P. Morgan don’t. They trade on private exchanges – Dark Pools – that regular investors don’t have access to.

Dark Pools are networks that allow institutional investors to buy and sell large blocks of shares without most traders seeing their hands.

Goldman Sachs can sell 20 million shares without moving the market down, because it doesn’t have to report one single share being sold until its entire order of 20 million shares is filled.

Don’t think this is a tiny obscure area of the market. More than 40% of the total volume traded in the stock market is being executed in Dark Pools.

I’ve devoted the past 26 years to studying the Dark Pools phenomenon.

You may be wondering where I learned about Dark Pool trading.

After college, I made my way to Wall Street, where I cut my teeth trading for Schonfeld Securities, one of the world’s largest and most prestigious proprietary trading firms. The firm staked traders with capital, supplied them with cutting-edge technology and information, and shared trading profits with them.

In my first year, they named me “Rookie of the Year”… and I eventually acquired the nickname “Trading Goddess.”

It was there that a legendary trader took me under his wing and taught me all about the Dark Pools.

Not long after learning about this hidden corner of the financial world, I became one of the top traders at the firm. But after several years on Wall Street… I left my lucrative career to raise a family.

However, I didn’t completely leave the financial world behind. I took the knowledge of the Dark Pools with me and began making a Wall Street-sized income, trading from home.

Soon, I began teaching others to do the same, and they achieved incredible results.

Now that the kids are out of the house, I trade full time while publishing my analysis of Dark Pools and the short-term trading opportunities they create.

While at Schonfeld, I learned a critical secret for making short-term profits in the stock market: “Follow the money.”

Sure, we paid attention to fundamentals like earnings and cash flow. You need that for long-term investing. And yes, we all knew technical analysis inside and out.

But the overriding strategy and mantra of Schonfeld traders was “Follow the money.”

And the best place to follow the money is the Dark Pools.

Thanks to our analysis of the Dark Pools, Schonfeld traders had insight into when and where large trades – literal tidal waves of capital – were poised to enter the market and move prices.

Fundamentals matter over the long term, but when it comes to trading short-term moves, we want to know what giant buyers and sellers are doing.

So… if you’re a long-term “buy and hold” investor, I hope you’re paying attention to the fundamentals. They’re what count in that sort of investing.

But… if you want to make big money trading short-term moves – if you want to profit from those big unexplained stock moves we all see so often – don’t follow the fundamentals.

Follow the money… the Dark Pool money.

Let’s Look at an Example

On March 3, 2020, my analysis of Dark Pool trading in Schlumberger NV (SLB) indicated the oil services stock was poised for a short-term large move.

It wasn’t clear which direction the stock was headed. All I knew from the notice was that a big move was coming. So, I recommended a strangle – a bullish and bearish position – so that way we’d be covered regardless.

By the end of the trading day, Schlumberger’s stock price was sliding. The next day, it fell further.

Just two days after the “Buy” notice, I sent out word to close half of the bearish side of the trade… for a return on investment (ROI) of 108%.

The following day, I recommended selling the second half of the bearish trade… this time, locking in 180%.

That was a simple, blended return of 144% on the bearish side of the trade… and a total return of 75%… in just three days.

That’s the power of Dark Pool trading.

As you can see, situations like this create trading opportunities with excellent risk/reward setups. These are the kinds of opportunities I’ll let you know about each and every week in Dark Pool Trader.

I recently recorded a special presentation explaining my trading strategy in detail, and you can see that recording by clicking here.

Matt McCall’s MoneyLine Podcast

Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about precious metals. Should you be investing in them? That’s a common question asked by viewers, and in this special episode of MoneyLine Matt provides the answers. He gives you all his thoughts on currency, gold, industrial metals, cryptos, and more… and you won’t want to miss it!

You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.

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