I use dark pools probably about twice a month. When we want to buy or sell a large quantity of a low volume or low float position the dark pools are advantageous for getting our clients the best price. NWBO would be a great example if we were to buy for our clients (I own it personally, it's not a position my company owns). As everyone here knows, buying a large quantity could move the price drastically. Our objective is to get all of our clients the same price so we buy a block of shares. Say we needed 500k shares. That is over 100% of the average daily volume so it would take days to do it correctly and we take the risk that the price moves out of our range. When I solicit the shares I want to buy to the open market I can choose how many shares I actually want to show I am trying to buy to the public, and typically you always just show 100 shares and 100 shares keep displaying after 100 is filled until you get to your full quantity. That's not even a dark pool, that is the open market. The problem with this route is even though I can show the public only 100 shares I am still showing the exchange and market maker that I want 500k shares and the maker will take that information and move the price up knowing I have so many shares I want to buy. Instead of being at the mercy of the market maker moving the stock price up on me I can send my order to the dark pool I have access to. The dark pool just matches me up as a buyer with a seller in the dark and nobody knows how many shares there are in the pool being offered or sought and the price is not altered in advance. The public will see my orders filling, almost always in between the bid and ask because that is where I will keep my order and I'll move it as the price is moving so that I am not paying more than if I had thrown the order in small pieces to the exchange.
If you have access to a live price book and quote recap during the trading day and you see shares exchanging hands but the orders not coming off the price book, those shares are being exchanged in a dark pool.
Sorry if this is confusing, let me know if you need any clarification.
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