RE: RE: RE: RE: RE: Macquarie A little complicated these hidden orders i know. Here's a little more enlightenment. Stock market operators TMX Group Inc. and its biggest competitor, Alpha Group, now both have new order types designed to help traders hide their intentions when trading stocks. The idea is to enable so-called "dark" orders, which hide in the shadows of the markets and can't be seen by traders looking at the bids and offers.Such orders are popular with traders trying to buy or sell big blocks of stock who don't want knowledge of their intentions leaking out and moving markets.But differences between the proposed Alpha order types and the new offering that TMX Group unveiled Wednesday reveal a big divide over how so-called dark orders should be handled, and one that's a fundamental point of contention for regulators as they try to craft overarching rules to deal with the issue.The core idea of a dark order is that nobody can see it until after the fact, when the order matches up with another and the trade shows up on the tape.The big difference between the TMX and Alpha order types is who can trade against them.The TMX's new orders on the Toronto Stock Exchange and TSX-Venture exchanges can match up with so-called light, or displayed orders. In other words, a hidden order can find a regular order.Alpha's IntraSpread Facility as it currently is proposed can only match up with other orders that specify to look for matches with dark orders, and only with orders from the same dealer. In other words, an order from RBC Dominion Securities can only match with another RBC order, cutting out the rest of the market.The structure of Alpha's order has drawn a lot of comment, both supportive and critical, from others in the industry. (They can be found here.)TMX argues that its order is a fairer way to do dark because it doesn't penalize traders who are willing to show their orders in the displayed market by cutting them out of trading with dark orders, and it doesn't freeze out orders from other dealers. One of the core principles of stock market structure is that investors should get a benefit in exchange for allowing their order to be shown, which comes at a cost because others get a hint at their strategy.The fact that dark can trade with all visible orders in the TMX system means an "opportunity for the liquidity pool to grow, not to decrease," said Kevan Cowan, who runs TMX Group Inc.'s equity markets operations, overseeing the Toronto Stock Exchange and the TSX Venture Exchange.Jos Schmitt, head of Alpha, said that the restriction that limits trading to the same broker is likely to come off in further iterations, but for starters the intent was to "keep it simple."The bigger question is where regulators are going to come down on dark markets, and the broad principles that should govern what is allowed and what isn't when it comes to hiding orders, rather than just ruling on a case-by-case basis."We are at a bit of a fork in the road here," said Mr. Cowan.Mr. Schmitt said he agreed that it's up to the regulators now to lay out a framework, but urged that markets be able to choose different paths to offer options to traders."The regulators should support and allow multiple strategies," he said.