One practice is referred to as dark pools. In dark pools, big institutional investors trade large blocks of shares with each other. Because these transactions are private, they don’t reveal big investors’ trading strategies to the broader (or, to continue the metaphor, “lit”) market. That’s their attraction. Dark pools have flourished. In 2004, there were eighteen dark pools comprising 1.5 percent of the market’s volume. By 2009, there were over fifty comprising 12 percent of the volume. Altogether, off-market trading—in dark pools or internally at broker-dealers—accounts for nearly one
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