Dark Pool Analytics
Dark pool analytics provides visibility into institutional trading activity that occurs off public exchanges. TradeAnon aggregates and analyzes FINRA-reported short volume data to help traders understand where institutional money is flowing.
Overview
Dark pools are private trading venues where institutional investors execute large orders without displaying their intentions to the broader market. While individual dark pool trades are not publicly reported in real-time, FINRA requires reporting of aggregated short volume data, which TradeAnon collects and analyzes daily.
What This Feature Provides
- Short Volume Analysis — Daily short selling volume by symbol
- Short Ratio Trends — Short volume as a percentage of total volume over time
- Buy/Sell Imbalances — Derived signals from short volume patterns
- Sector Aggregations — Institutional flow by market sector
- Historical Comparisons — Current readings vs historical norms
Why It Matters
Short volume data reveals institutional positioning and sentiment:
- High Short Volume — Often indicates hedging activity or directional bearish bets
- Low Short Volume — May suggest accumulation or reduced hedging demand
- Trend Changes — Shifts in short ratios can precede price moves
- Sector Rotation — Relative short activity across sectors shows where institutions are active
Key Metrics
Short Volume
The total number of shares sold short through dark pools and off-exchange venues on a given day.
Interpretation:
- Absolute values vary significantly by stock (high-volume stocks naturally have higher short volume)
- Compare to historical averages for context
- Large spikes may indicate significant institutional activity
Short Ratio
Short volume divided by total volume, expressed as a percentage.
Short Ratio = Short Volume / Total Volume × 100
Interpretation:
- Typical range: 30-60% for most stocks
- Above 50%: Elevated short activity (not necessarily bearish—often market maker hedging)
- Below 30%: Unusually low short activity
- Context matters: compare to the stock's own historical range
Non-Short Ratio
The complement of short ratio, representing volume that was not short selling.
Non-Short Ratio = 100% - Short Ratio
Interpretation:
- Higher non-short ratio may indicate net buying pressure
- Useful for identifying accumulation patterns
Dark Pool Index (DPI)
A normalized score that combines short ratio with volume characteristics to create a single institutional activity measure.
Interpretation:
- Positive values: Above-average institutional selling pressure
- Negative values: Below-average institutional selling pressure
- Extreme readings (±2 or more): Significant positioning shift
How to Use This Feature
Daily Monitoring
- Check the dashboard for today's most active symbols by short volume
- Review short ratio changes from the previous day
- Identify outliers — stocks with unusual short activity relative to their norm
- Cross-reference with price action to understand institutional positioning
Symbol Analysis
For individual stock analysis:
- Select a symbol to view its short volume history
- Compare current short ratio to 20-day and 50-day averages
- Look for divergences between price trends and short ratio trends
- Check sector comparison to see if the stock is being treated differently than peers
Sector Analysis
For macro-level analysis:
- View sector aggregations to see where institutional activity is concentrated
- Track sector rotation through relative short activity changes
- Identify sector-wide hedging during market stress
Practical Examples
Example 1: Accumulation Signal
A stock shows declining short ratio over several days while price consolidates:
- Short ratio drops from 52% to 38% over 10 days
- Price remains flat with tight range
- Volume increases slightly
Interpretation: Reduced selling pressure with stable price and increasing volume may indicate accumulation.
Example 2: Distribution Warning
A stock shows rising short ratio during a price rally:
- Price up 15% over the month
- Short ratio rising from 45% to 58%
- Volume increasing
Interpretation: Institutions may be hedging or establishing short positions as price rises. The rally may face headwinds.
Example 3: Short Squeeze Setup
A stock with historically high short ratio shows:
- Short ratio consistently above 55%
- Price breaking above resistance
- Volume surge on breakout
Interpretation: High short ratio combined with bullish price action may trigger short covering, accelerating the move higher.
Limitations
Understanding what dark pool data does NOT tell you:
- Not real-time — Data is reported T+1 (one business day after trade date)
- Not directional certainty — High short volume doesn't always mean bearish sentiment; market makers short shares when filling buy orders
- Aggregated only — Individual trade details and participant identities are not disclosed
- Excludes some venues — Only covers FINRA-reported venues, not all dark pools
Data Source
Dark pool data is sourced from FINRA's Reg SHO daily short sale volume files. FINRA requires all broker-dealers to report short sale transactions to a FINRA facility.
Update Schedule: Daily, typically available before market open for the prior trading day.
Related Concepts
Subscription Access
| Tier | Access Level |
|---|---|
| Free | Last 30 days of data |
| Pro | Full historical data |
| Enterprise | Full historical data |