Dark pool

Markets which are hidden away from pubic stock exchanges and operate anonymously. Dark pools allow large blocks of shares to be traded between financial institutions with the price or identity of the buyers or sellers only being revealed once the trade is complete. This prevents large pricing swings in the market as other traders try to cash in on big deals. However, dark pools have been criticised for their lack of transparency as they enables institutions to build up positions in secret. Dark pool trading has been fuelled by the increased use of algorithm trading and computerised trading.

This definition is for general information purposes only