Here’s how to find credible, long-form PDFs on this subject:
Here is how it works: An algorithm detects a large buy order from a pension fund coming down the pipe. In the fraction of a second before that order hits the public exchange, the HFT algo buys up the available shares, driving the price up a penny or two. It then immediately sells those shares to the pension fund at the higher price.
Anonymity: Unlike "lit" exchanges, dark pools do not publish pre-trade bids or offers. Only the final trade price is reported after execution. Types of Pools: Here’s how to find credible, long-form PDFs on
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Regulatory Context: For a look at how authorities are responding, resources like FINRA and the SEC offer guides on the current rules governing these private venues.
What are Dark Pools?
Dark pools are private, non-transparent trading venues where institutional investors execute large "block trades" away from public exchanges like the NYSE or Nasdaq.