Dark pools definition

Dark pools has a particular significance in relation to IG's platform. Here, we define dark pools in general investing and explain what it means to you when trading with IG.

Dark pools

Dark pools are networks – usually private exchanges or forums – that allow institutional investors to buy or sell large amounts of stock without the details of the trade being released to the wider market. Dark pools can also be referred to as dark pool liquidity, or dark liquidity.

They came about as a way for large-scale investors to make deals with each other that would not result in an adverse price move against them.

If an investor wants to sell a major portion of a company’s stock on a public exchange they must declare their intention, and run the risk that the value of the stock will drop thanks to the swell in supply. Dark pools remove this risk by announcing deals only after they have taken place, and restricting access to deals.

With IG

Some traders have spoken out against the existence of dark pools as they feel that their presence unfairly gives an advantage to large scale institutional investors. Any share dealing client with IG can redress the balance and access dark pools via smart order routing technology.

Visit our share dealing section

Read our share dealing pages for more information about share dealing with IG.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.