Dark pools are venues in which the trading of securities occurs in private, without public access to information about the transactions before they occur. These private securities exchanges operate in secrecy, with little transparency or regulation. Dark pools are used mainly by institutional investors seeking to buy or sell large volumes of securities, usually stocks, without the disadvantages they encounter in public exchanges, such as the New York Stock Exchange. Investors trade in dark pools mainly for reasons of liquidity, pricing, and fees. Such trading ensures that trades are completed fully, at the best available prices, with the lowest possible trading costs.

For traders of large blocks of stock, the first disadvantage of public exchanges is the uncertain supply of buyers or sellers for the volumes ...