It's ironic that the "dark" in "dark pool" is now being interpreted in a negative manner, synonomous with "opaque". The reason such pools are dark is to reduc

It's ironic that the "dark" in "dark pool" is now being interpreted in a negative manner, synonomous with "opaque". The reason such pools are dark is to reduce the market impact of large orders. If an institutional investor (e.g. a pension fund) were to announce to the world "We are going to sell a shitload of Apple shares tomorrow!", the Apple share price would fall, as everyone front-ran the trade. That would result in a lower price for the pension fund when it actually got around to selling its shares. Regulators actually recognise the advantages in reducing market impact and they specifically allow delays in reporting large, off-exchange trades between clients and broker-dealers to the market for that reason. Dark pools were conceived of as a mechanism to allow institutional investors to trade off-exchange (in theory, with one another), so that they didn't have to post bid orders publicly on the "lit" exchange. The reason they're called "dark pools" is because you can't see the order book, so you don't get to see big orders being added to the book (and take advantage of the knowledge that someone's just placed a big order, to front-run them). In other words, you don't know how deep the pool (i.e. the liquidity on the order book) is - just like you can't see how deep a dark pool of water is. As someone who works in financial markets, it's weirdly fascinating to watch terms like "dark pools" and HFT end up being used as epithets, almost, by the media. It's a bit like how the word "hacker" came to be regarded by many as describing a computer criminal.