Lost in the dark

By Anuj Gangahar
1 hour, 39 minutes ago

If something happens in the dark, its full impact can be difficult to assess until the lights come on.

This notion is at the heart of concerns on Wall Street about how much equity trading is now taking place on internal crossing networks, or as they have been more mysteriously termed, dark pools.

Dark pools are private interbank or intrabank platforms that are widely used to trade stocks away from exchanges. They are used by clients such as hedge funds to buy and sell large blocks of shares in anonymity, avoiding the risk of moving the public price of a stock on an exchange as a result of copycatting by other traders. According to consultancy The Tabb Group, dark pools already account for 12 per cent of US daily stock trading volume and rising.