Dark pool indicator is private transactions for trading industries. The names of the exchange are about their clarity. A dark pool indicator is also known as dark pool liquidity. It also helps block trading in which many securities are purchased or sold, and it is done by institutional investors who do not want to harm the market.
According to the CFA institution, the black pool was originated in the 1980s.
Why is a dark pool used?
Investors use the dark pool for buying or selling millions of share stocks. The transparency of it can be a great plus point for any investor for getting a better price to sell a stock that it was purchased for. As there is no order book visible to the public so the trader can hide their intentions before any trading, you can easily find a buyer as there are many large investors who can invest in your stocks.
dark pool indicator takes high popularity among the investors and traders as they promised to reduce the market impact of large orders, whereas, in the public market, investors and traders suffer a great loss as a large number of stocks were sell at high rates than the market because of its visibility.
Since a wide range of large participants is present at the dark pool, matching big orders is high rather than the public market.
They incur fees are not charged or incorporated which can lead to lots of savings and cost-effective price.
It can have a very different price from the public market, which can be a disadvantage for many investors who are unaware of the price at the public market.
As there is transparency in the market, there isa high probability of getting abused.