It's just a way for MM's to transfer large amounts of shares without effecting pps.
It's rather complicated but should be banned.
When initially implemented it was suppose to help regulate the market better. So for instance when an institution bought millions of shares at time ( block trades) it wouldn't have a huge impact on pps.
Dark pools are exchanges that allow the big institutional investors to place large orders (hundreds of thousands or larger blocks) without impacting the price of the security. The trades don't show up during regular trading hours. By not impacting price, institutional investors can accumulate or sell millions of shares before their activity is discovered and the stock price goes up or down. You can use accumulation indicators in charting software to detect this activity. One example would be the Balance of Power indicator in the worden TC2000 software.
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