What Are Dark Pools?
Dark Pools are private, off-exchange markets where institutional investors — hedge funds, pension funds, banks, and more — execute large trades without revealing their intentions to the public market.
- Unlike NYSE or NASDAQ, dark pools do not display orders in the public order book.
- Orders execute in private transactions, preventing large size from moving price before fill.
- Big money uses dark pools to avoid slippage and front-running.
- Over half of U.S. trading now happens off-exchange in dark pools.