Dark pools are private exchanges for trading securities that are not accessible by the investing public. Also known as “dark pools of liquidity,” the name of these exchanges is a reference to their complete lack of transparency. Dark pools came about primarily to facilitate block trading by institutional investors who did not wish to impact the markets with their large orders and obtain adverse prices for their trades.
Dark pools are sometimes cast in an unfavorable light but, in reality, they serve a purpose. However, their lack of transparency makes them vulnerable to potential conflicts of interest by their owners and predatory trading practices by some high-frequency traders.
KEY TAKEAWAYS
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Dark pools are private exchanges for trading securities that are not accessible by the investing public.
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Dark pools were created in order to facilitate block trading by institutional investors who did not wish to impact the markets with their large orders and obtain adverse prices for their trades.
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As of February 2020, there were more than 50 dark pools registered with the Securities and Exchange Commission (SEC).
https://www.investopedia.com/articles/markets/050614/introduction-dark-pools.asp