Dark pools, to put it simply, are essentially trading platforms and exchanges that match block institutional orders, bypassing the main exchanges completely in off-market deals, and don’t publish stock quotes. The geeky jargon in the circuit is primarily because it’s been made possible by increasingly sophisticated technology like algorithmic trading tools. Algorithmic trading, says one study, will account for more than 50 % of all shares that change hands in the US by 2010.
Additional Reading
- Dark pools threaten the existence of LSE, NYSE and Euronext
- The secret stock market
- Dark liquidity
- Buyside cautious of trading in dark pools
