Dark pools are trading venues that offer limited pre-trade transparency and can be an ideal environment for traders hoping to conceal their private information. The once-rapid growth of dark venues has attracted attention from academics seeking to understand the impact of dark trading on order-execution quality and price discovery on public exchanges. Prior empirical studies have found that dark venues are, on average, associated with uniformed order flow.

Senior Associate Dr. Nguyet Nguyen compares informed trading in a fair-access dark venue with  restricted-access dark venues in a recent article published in The Quarterly Journal of Finance. Dr. Nguyen found robust evidence of informed trading taking place in the fair-access dark venue, but not in other dark venues.

The full article, “Informed Trading in Dark Pools: Fair-Access Dark Venue vs. Restricted-Access Dark Venues,” is available for download below.

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