Dark pool.

In plain English

A dark pool is an alternative trading system that does not publish its order book, so buyers and sellers cannot see the resting orders. Institutions use them to move large blocks without signaling their intent and pushing the price against themselves. Trades are still reported to the public tape after they execute, so the information is delayed rather than hidden forever. Dark pools are regulated and must report volume, but the pre-trade opacity means price discovery happens elsewhere, on the lit exchanges. Critics argue that shifting volume off-exchange weakens the quality of the public quote everyone else relies on.

01Why it matters

A meaningful share of daily volume prints away from the public exchanges, so the quote on your screen is not the whole market and can lag what large holders are doing.

02The math, step by step

Say a pension fund wants to sell 800,000 shares of a stock that trades 2 million shares a day. Posting that on an exchange would drop the price before the order filled. Splitting it across dark venues at prices near the public midpoint can complete the sale with less price impact.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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