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Dark Pools

Trading Term

Dark Pools are private trading venues where institutional investors can execute large orders without exposing their intentions to the public market. These platforms offer anonymity, reducing the market impact of sizable trades and potentially achieving better execution prices.

By concealing order sizes and prices, dark pools prevent significant trades from influencing market prices. This anonymity benefits both buyers and sellers by minimizing slippage and adverse price movements.

IBKR provides options for controlling dark pool routing through SMART routing settings. Users can choose to either exclude Dark Pools completely as a routing destination or specifically route orders to Dark Pools Only. These preferences can be configured through the Global Configuration menu under Smart Routing settings, where users can select either “Do not route to dark pools” or “SMART Dark Only” in the SMART Stock Routing Algorithms section.

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