Dark pools are trading systems where there is no pre-trade transparency of orders in the system (ie there is no display of prices or volumes of orders in the system).
Dark pools can be split into two types:
- Systems such as broker crossing networks that are not subject to pre-trade transparency requirements.
- Trading venues such as regulated markets and MTFs that use waivers from pre-trade transparency not to display orders.
Some definitions of 'dark pool' exclude broker crossing networks and the like (1. above) and restrict the definition to the second type (2. above).