Dark pool
MarketsDefinition
Private trading venues operated by major banks (Goldman, JPM, Morgan Stanley) where institutional investors trade large blocks anonymously, off the lit exchanges. ~40% of US equity volume now executes off-exchange.
Pros: minimize market impact for big trades. Cons: less price discovery; potential information asymmetry. Regulated by SEC under Reg ATS.
Pros: minimize market impact for big trades. Cons: less price discovery; potential information asymmetry. Regulated by SEC under Reg ATS.