Introduction to Dark Pools

Abstract

The “dark pool”—a somewhat mysterious, even ominous, term—is the name given to a market structure that is quickly becoming an integral part of the traded financial markets of the twenty-first century. While on the surface the concept of a dark pool might sound threatening, reality is fortunately rather different: such pools convey a range of benefits to both buyside investors and sell-side brokers and dealers, contributing to rapid growth in a relatively short period.