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Matt Levine

Dark Pool Sold Some Order Flow

Also IPO order books, Reddit algorithms, Evergrande and front-running.

Programming note: Money Stuff will be off tomorrow, back on Monday.

A rough, inaccurate but useful way to think about U.S. equity market structure is that the prices on the stock exchange are bad. You can go to a public stock exchange and see a “lit,” public bid and offer for every stock; the exchange will tell you at all times, like, “you can buy this stock for $10.05 or sell it for $9.95.” (The best buying and selling price available on all the lit exchanges is called the “national best bid and offer” or NBBO.) But if you ever find yourself paying the lit price to buy a stock, or accepting the lit price to sell it, you have done poorly. That is just the sticker price, the advertised price, the price for rubes. Somewhere, in the dark, there are hidden orders at better prices, and if you and your broker are any good you will find them.