Dark markets commonly execute large order sizes at the midpoint of the prevailing BBO for a security.
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Question:
- Dark markets commonly execute large order sizes at the midpoint of the prevailing BBO for a security. They generally report these trades to an Alternative Display Facility (ADF) operated by FINRA. Most exchanges argue that Dark Pool volume should be limited. Why?
- Explain why Dark Pools have attracted a substantial share of current U.S. and European trading volumes.
- Why do many larger institutional traders prefer Dark Pools for their orders?
- When do institutions use "lit" markets?
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