What Is A Dark Pool?

Dark pools are parallel, and largely opaque, institutional trading markets where large transactions in equities, bonds, and foreign currencies occur daily. They are invisible to the public and other participants in the dark pool.

Institutional trading is global and can have a huge impact; the strategies and quantities of securities being traded can literally move their respective markets. To minimize this impact, institutional trading is often done in secret on legal, private, alternative trading systems (ATS), called “dark pools.”