Dark Pools and Giant Question of Transparency in Liquidity | Exploring Markets

Dark Pools and Giant Question of Transparency in Liquidity

Fragmentation of exchanges and fractured markets. There are more exchanges now than ever.

Before a trader could walk in a crowd and assess supply and demand of an equity.

Now, one must represent oneself in the various markets. NYSE, BATS, Dark Pools. At the end of the day, trades can have more or less liquidity in various pools. Sometimes different prices too.

Hard to grasp real sense of liquidity in this environment. Difficult to know a fair price in a Dark Pool. Or, for example, the price on the NYSE vs the Dark Pool.

The conversation we must all ask is who has the most liquidity? Dark Pools or common exchanges?

Paddy Hirsch on the education of Dark Pools: