Dark pools are a bigger and bigger part of the stock market, now eclipsing volume at exchanges

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Dark pools are no longer just a shadowy corner of the financial world. They have become a dominant force, quietly overtaking traditional exchanges in trading volume. These private trading venues allow institutional investors to move massive amounts of stock without public scrutiny, and their influence is growing at an alarming rate.

Recent data shows that dark pool trading now accounts for more than 50 percent of all stock market transactions. This marks a dramatic shift from just a decade ago, when public exchanges handled the majority of trades. The rise of these hidden markets has sparked concerns about transparency, price manipulation, and the overall stability of financial systems.

The appeal of dark pools is simple. Large investors can execute trades without revealing their intentions, avoiding price swings that would occur if their orders were placed on public exchanges. This secrecy benefits hedge funds and institutional traders, but it leaves retail investors in the dark, unable to see the true flow of market activity.

Regulators have struggled to keep up with the rapid expansion of dark pools. The Securities and Exchange Commission has introduced rules requiring some level of trade reporting, but enforcement remains weak. Critics argue that the lack of oversight allows market insiders to manipulate prices, creating an uneven playing field where ordinary investors are at a disadvantage.

Sources:

https://accountinginsights.org/dark-pools-market-impact-and-behavioral-analysis

https://money.stackexchange.com/questions/24627/do-dark-pools-have-to-declare-the-volume-transacted-at-the-end-of-the-day

https://www.ibtimes.com/are-dark-pools-reason-why-xrp-price-barely-moves-despite-big-news-3771740