Dark Pool
A private, off-exchange trading venue where large institutional orders are matched anonymously without pre-trade transparency.
A dark pool is an Alternative Trading System (ATS) where orders are concealed from the public order book until after they execute. This prevents large institutional orders from telegraphing intent to the lit market, reducing market impact and adverse price movement before the trade is done.
Dark pools trade at or within the prevailing national best bid/offer (NBBO) and account for roughly 10–15% of U.S. equity volume. (The larger ~40%+ figure often quoted is total off-exchange volume, which also includes wholesaler/single-dealer internalization — much of it PFOF-driven — not just ATS dark pools.) They are legal and regulated, but critics argue they fragment liquidity and reduce price discovery quality for everyone.
Unusual dark pool prints — large blocks at odd prices — are watched closely by short-term traders as potential signals of institutional positioning.
Related Terms
Block Trade
A single large transaction — typically 10,000+ shares or $200,000+ in value — usually executed privately to minimize market impact.
AdvancedHidden Order
A limit order whose full quantity is invisible to other market participants — only the fill is reported post-execution.
AdvancedIceberg Order
A large order split so only a small visible portion shows in the order book; the rest is hidden and refreshes automatically as each slice fills.
AdvancedOrder Flow
The stream of incoming buy and sell orders hitting the market — analysis of order flow reveals who is aggressive and where price is likely headed next.
AdvancedSmart Order Routing
Automated logic that scans multiple trading venues to find the best price, fee, and fill quality for each order.
Advanced