Dark Pool Liquidity

AAA

DEFINITION of 'Dark Pool Liquidity'

The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is represented by block trades facilitated away from the central exchanges.

Also referred to as the "upstairs market," "dark liquidity" or "dark pool."

INVESTOPEDIA EXPLAINS 'Dark Pool Liquidity'

The dark pool gets its name because details of these trades are concealed from the public, clouding the transactions like murky water. Some traders that use a strategy based on liquidity feel that dark pool liquidity should be publicized, in order to make trading more "fair" for all parties involved.

RELATED TERMS
  1. Flash Trading

    A controversial computerized trading practice offered by some ...
  2. Volume

    The number of shares or contracts traded in a security or an ...
  3. Liquidity Risk

    The risk stemming from the lack of marketability of an investment ...
  4. Liquidity

    1. The degree to which an asset or security can be bought or ...
  5. Upstairs Trade

    A buy or sell transaction for an exchange-listed stock that is ...
  6. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
RELATED FAQS
  1. What is a common strategy traders implement when using the Time Segmented Volume ...

    A trader uses time segmented volume (TSV) to compare volumes in different time frames. It is a leading indicator because ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  3. Investing Basics

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  4. Options & Futures

    Understanding Financial Liquidity

    Understanding how this measure works in the market can help keep your finances afloat.
  5. Active Trading

    Should You Be Afraid Of Dark Pool Liquidity?

    Don't fear the deep end. Dark pool liquidity can help drive down stock cost for everyday investors.
  6. Options & Futures

    Can Insiders Help You Make Better Trades?

    Find out why the trading activity of owners and executives can be a valuable trade-confirmation tool.
  7. Investing Basics

    Explaining Market Value of Equity

    Market value of equity is the total value of all the outstanding stock as measured in the stock market at a particular time.
  8. Investing Basics

    What is Spread?

    Spread has several slightly different meanings depending on the context. Generally, spread refers to the difference between two comparable measures.
  9. Investing Basics

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
  10. Brokers

    10 Brokers That Pay You To Open An Account

    Open an account with one of these brokers and you will get a bonus. Just be sure it's the right account for your needs.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center