• Dark pools are private asset exchanges designed to provide additional liquidity and anonymity when trading large blocks of securities away from prying eyes.

  • Dark pools provide price and cost advantages to acquiring institutions such as mutual funds and pension funds, who claim that these advantages ultimately go to the retail investors who invest in these funds.
  • However, the lack of transparency of dark pools makes them vulnerable to conflicts of interest from their owners and predatory trading practices from HFT companies.